Risk management and insurance
during the Covid-19 pandemic
The Covid-19 (coronavirus) pandemic is undoubtedly causing significant strain on every business in the removals
and storage industry. It is crucial, however, that you make every effort to protect your assets, as a loss at this
time could also put your business in jeopardy.
April 2020 Removals & Storage 17
During times of mass unemployment, economic recession/
strain, and school holidays, it is an unfortunate reality that
arson, theft and malicious damage crime rates increase.
Indeed, two supermarket delivery vans were subject to an
arson attack less than an hour after the Prime Minister issued
the ‘lockdown’ order. We advise the following measures be put
in place to ensure your vehicles, customers’ goods in storage,
buildings and other assets are as safe as possible.
If you have access to a storage facility or other warehouse with
available space, there will be the temptation to park vehicles
inside. Remember, while parking vehicles inside may reduce
the likelihood of theft and vandalism, it will not remove
exposure to fire. If you do park any vehicles inside, you must
ensure that the vehicle batteries are disconnected, and tanks
fully drained of fuel.
If you park vehicles outside, you should allow as much
separation as possible, as this will reduce the likelihood of fire
spreading between vehicles, and park the vehicles away from
Customers’ goods in store and other
Continuing storage charges will support your business through
periods where other sources of revenue are uncertain. If your
storage premises are subject to a significant loss during this
time, not only will this vital revenue be lost, but, if you own
your building, you could also face losing your most valuable
asset. You should ensure any building you own or lease and
any stored goods are sufficiently protected, particularly as it
is highly likely the premises will be unoccupied for a
The traditional containerised storage approach adopted by
the removals industry means it is unlikely that a substantial
value of customers’ goods could be stolen. However, it is
common for arson to occur following a break-in, and this is a
more significant concern. With regards to arson risk, where
you own or lease storage premises, and it does not have 24-
hour security or monitored CCTV, you should perform
inspections as regularly as you can to monitor security. You
should ideally also discuss risk management with the owners
or occupiers of buildings which are adjoining or close-by, as
fire can quickly spread between neighbouring properties. If
you use trade or other third-party storage, such as self storage,
you should enquire with the provider to ensure they have
similar controls in place.
Generally, you should ensure all waste, pallets and other
flammable materials are either cleared or stored a significant
distance from any building (or vehicle). You must also
remember to follow guidance from the Health & Safety
Executive on how to store any gas bottles you keep on-site (for
use on a Fork-Lift Truck, for example). Calor has published
some useful information on this (see www.calor.co.uk/
gasbottles/advice/storing). While you carry out your checks,
you should make sure your neighbours are also taking a
Marine Insurance Certificates will include cover for storage
when it is incidental to transit (i.e. this does not include any
period of storage which you separately charge for before or after
shipping). This cover is typically limited to a period of up to 60
days. There will inevitably be delays for some consignments due
to the numerous Covid-19 pandemic-related restrictions. You
must notify your broker to extend cover for each shipment.
Cyber-attacks and fraud
The National Crime Agency (NCA) has published a warning
that organised and cyber criminals are exploiting the current
Covid-19 pandemic. You should be particularly cautious
where you receive any requests to share any financial or
personal information. In addition, consider the authenticity of
emails before clicking links or opening attachments.
Your insurance policies
While following the above recommendations will help reduce
the likelihood of loss or damage occurring, it is impossible to
remove the risk that your assets or stored customers’ goods
could be damaged or destroyed during this challenging time.
It is, therefore, vital that you maintain full insurance cover for
Other important considerations:
• You are legally required to cover vehicles that are not
declared SORN for third party risks.
• Your motor policy may be issued on declaration basis, so
any return premiums due after reducing cover (e.g. from
Comprehensive to Third Party, Fire & Theft) might not be
processed until the end of the current declaration period.
You should check with your broker to see if a declaration
• Any return premiums for reducing or removing cover will
likely not be provided to you for up to three months after
the effective date, as it takes some time for insurers to
administer premium rebates. You may not have any
premium returned to you until after the current crisis
• You may need to notify your insurers if a building you
insure, be it owned or leased, will be unoccupied for a
period of longer than fourteen days. The cover may then
be restricted, but this varies per insurer, so you should
speak with your broker.
• If you pay by instalment to a premium financing
company, such as Premium Credit or Close Premium
Finance, you should check to see how many payments
you have left, as the agreements are often subject to just
ten monthly payments. Your broker can help with this.
• If you are suffering from financial difficulties, you should
contact your premium financing provider directly before
you default on a payment.
Covid-19 and the insurance industry
There have been many questions raised relating to whether
insurance cover is provided for losses caused by the Covid-19
pandemic. A pandemic is an ‘uninsurable’ risk, so, broadly
speaking, the insurance industry does not provide cover. There
are several other risks which are uninsurable, such as war and
nuclear disasters. In practice, if these types of risk were insured,
all insurance premiums would need to increase significantly
so the insurers could fund claims. Premiums would become so
expensive that they would be unaffordable. The insurance
industry is not suited to provide compensation for population-level
or pandemic events. Only governments have access to
capital at this scale.
To answer a few specific questions:
• Although Business interruption insurance protects
loss of revenue, the cover is provided only when there is
physical damage at your premises (e.g. damage to a
building caused by fire or flood). Some policies include a
nominal disease extension, but the cover will be restricted
and may not adequately compensate your business.
• Liability insurance policies (i.e. Public, Products and
Employers’ Liability) by their very nature cover legal
liability, not physical property or loss of business revenue.
• Travel insurance policies may provide cover for
cancellations, depending on the date of the trip, the time
you made the booking and the destination. The World
Health Organisation declared Covid-2019 a Public Health
Emergency of International Concern on 30 January 2020.
Since this time, the UK Government, via the Foreign &
Commonwealth Office (FCO), has publicised related
travel advice for every destination around the world. Your
insurance cover would be limited for bookings made after
30 January 2019. Insurers will also not provide medical-related
cover to individuals who travel to destinations
against FCO advice. You should speak to your broker to
discuss specific trips.
We wish you all the best during this difficult time. Please
contact your broker if you have any specific questions relating
to your insurance policies.
For more information, visit
By BAR Professional Advisors Basil Fry & Company and Reason Global