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Coronavirus & Business Insurance

By Andrew Saville on

With Coronavirus (COVID-19) officially declared a Pandemic in March 2020, and the landscape changing almost hourly, there is an air of great unease across Australia. Aside from the significant impact Coronavirus is predicted to have on our health system, there are also implications for the economy and potentially your business.

The number one question we are being asked by clients at the moment is: “How will my business insurance coverage respond or be impacted as a result of COVID-19?”

This article addresses:

  • Business interruption cover
  • Property insurance
  • Corporate travel insurance

Business interruption cover


General Insurance is unlikely to provide protection against losses and business disruption associated with a pandemic such as Coronavirus. Traditionally, business interruption policies were only designed to cover disruption associated with damage to an insured property. 

Doesn’t Business Interruption cover also cover disruption as a result of infectious diseases?

Over time, many business interruption policies have been expanded to cover temporary closures due to a number of other risks, this includes infectious diseases like legionaries disease, or a measles outbreak. Ordinarily however, these outbreaks only affect small pockets e.g. a shopping centre, or one or two buildings. Some polices do provide coverage for an outbreak 50km from the business location, but MOST only cover outbreaks isolated to the insured premises.

The coverage in standard Business Pack Insurance policies and Industrial Special Risk policies are not designed to insure against disruption caused by an infectious disease outbreak in a different state or country. 

What about a Pandemic?

The SARS (Severe Acute Respiratory Syndrome) outbreak in 2013, lead major insurers and reinsurers to conduct predictive modelling on the cost of business interruption claims in the event of a major pandemic e.g. The Spanish Flu, which caused between 40 to 100 million fatalities. Findings showed that the global pool of insurance funds would not be able to meet the cost of business interruption claims that occur in a pandemic. The insurance industry would simply collapse.

In response to these findings, most insurers and reinsurers added exclusions to insurance policies stating that ‘disruption from a number of highly effective diseases were not covered’. This clause excludes cover for any disease that is notifiable under the Quarantine Act 1908 (Cth), and the Biosecurity Act 2015 (Cth).

As of the end of January 2020, Coronavirus became a listed disease under the Biosecurity Act, and in March, a pandemic. Regrettably, this means there is essentially no insurance protection for disruptions to business arising from Coronavirus.

Property Insurance - tell us if your property becomes unoccupied

Amid the enforced, and devastating shut-down of businesses like gyms, restaurants, bars, salons, and retail etc., many properties could sit empty for a long period of time. For property owners, this may have implications for insurance cover.

Why? Insurance companies see unoccupied premises as posing a higher risk, due to the increased likelihood of break-ins, fire, vandalism and water damage. Under the Duty of Disclosure section of the Insurance Contracts Act (1984), if a property is left unoccupied over a certain period of time, it becomes the insured's duty to disclose to the relevant insurer(s) anything that may increase or change the risk at the property - e.g. the property being unoccupied. If there is a failure to disclose, insurance claims lodged could potentially be declined.


Insurers provide full cover for 30 days of continued unoccupancy before they require being notified, at which point they typically apply additional terms and conditions to manage the risk. These days however, depending on the insurer, some policies can automatically allow 30,60,90 or even 100 days of complete cover. After this time the policy may still provide protection, but be limited to restricted events, while others completely exclude cover if the insurer has not been advised of this change in risk before the end of the policy period.

With many business premises forced to close temporarily during the COVID-19 pandemic, it is important to be aware of this fact, and notify your insurance broker and / or insurance company if this applies to you.

Managing risk: What to do if your business premises is closing temporarily?

Due to coronavirus restrictions, many businesses are having to temporarily close, and allow staff to sustain operations by working from home. If this is the case for you, there are a number of important things to consider when it comes to protecting your premises.

Zurich have put together a helpful risk management checklist you can refer to as a guide to keep your property secure, and in the best condition possible while closed. Click here to access the risk management checklist.

Corporate Travel Insurance cover

This information is likely to apply to most Corporate Travel Insurance policies. Please note, this is General Advice only. For advice specific to your travel policy, please speak to your Whitbread broker, or your travel insurer.

Current travel advice:

  • If you or your employees are currently overseas, return home immediately
  • Domestic travel booked from 19/3/2020 will likely not be covered for claims relating to COVID-19. Bookings already made should be covered (subject to the terms and conditions of the policy wording).
  • All travel up to 30 June 2020 should be postponed or cancelled and costs should be covered if arranged prior to the COVID-19 outbreak.

Costs of returning home – curtailment cover:

Following DFAT’s upgraded travel warning, corporate travel policyholders and employees travelling overseas should return home immediately. The expense of this should be covered under ‘Curtailment’ (subject to the terms and conditions of the policy wording) provided that you:

  • Did not choose to enter a country or region within a country after it was subject to a DFAT 4 warning
  • Did not commence the trip after 3 March 2020, when COVID-19 could no longer be considered ‘unforeseen’
  • Booked the trip prior to 4 March and did not travel to China, Japan, Iran and certain regions within South Korea and Italy.

It is advised that return travel should be booked before 23:59 on 22 March 2020 AEST, and to travel on the first available flight. Some travel insurance companies may be able to assist in organising these arrangements.

Medical expenses cover:

It is almost certain you will not be covered for medical expenses relating to COVID-19 for trips that commenced from 13 March 2020.

With DFAT’s updated travel advice, overseas travel is highly restricted, however it is important to be aware that you will not be covered for medical expenses relating to COVID-19 if you or your employees choose to travel overseas and ignore official warnings about the risks of contracting and transmitting COVID-19.

You should be covered for medical expenses if you are already overseas. If you are currently overseas and departed prior to 13 March 2020, cover for medical expenses should be provided (subject to the terms and conditions of the policy wording).

Cancelling travel arranged prior to the COVID-19 outbreak:

Loss of Deposits (cancellation) may be covered, depending on when travel was booked. Loss of Deposits is determined by whether the COVID-19 risk could be foreseen at the time of booking. Travel booking dates likely to be considered when assessing claims for Loss of Deposits are:

  • Cancellation of travel booked before 30 January 2020 should be covered (except to Hubei province in China) - If you booked travel prior to 30 January (except to Hubei Province in China which was subject to a DFAT 4 travel warning from 24 January), and your travel arrangements have been directly affected due to circumstances beyond your control as a result of COVID-19 then cover should be provided for loss of deposits (subject to the terms and conditions of the policy wording).

  • Cancellation of travel booked between 31 January 2020 and 3 March 2020 may be covered (subject to the terms and conditions of the policy wording) - Cover depends on the extent of the COVID-19 outbreak in the country being visited at the time of booking and whether it can be considered unforeseen. Each claim will be considered based on the individual circumstances. Examples of key countries where the risk of COVID-19 may not be considered unforeseen for all or part of this period include;
    • China
    • Japan
    • Iran
    • South Korea
    • Certain regions in Italy
  • Cancellation of travel booked from 4 March 2020 is unlikely to be covered – From 4 March there is no cover for loss of deposits due to COVID-19 as it could no longer be considered an unforeseen event after that date (subject to the terms and conditions of the policy wording).

Claims for Loss of Deposits (cancellation) in relation to COVID-19:

It is important to contact your travel provider first as it is a requirement that you take steps to minimise losses under most Corporate Travel Insurance policy wordings. Many travel providers are allowing travel arrangements to be postponed or cancelled without penalty and it is important to contact them as soon as possible to minimise non-refundable costs.

For example, Qantas and Jetstar have stated that travel credit is available until 31 March for travel booked up to 31 May 2020. Please visit the airline websites directly for accurate and up-to-date information. 

Leisure Travel Insurance

Leisure Travel Insurance policies generally contain an exclusion relating to Epidemic and Pandemics. This means no claims will be payable. We advise you to contact your insurance broker or insurer for further advice, and reconsider all travel, as per the latest update from DFAT -

Stay informed 

The global situation is changing rapidly.

  • Before travelling, check for and take the advice of any travel warnings from DFAT on and WHO

  • Speak to your insurance broker for advice specific to your insurance program.


Tips to manage the risk of COVID-19 in the workplace:

The WHO (World Health Organisation) recommends the following:

  • Practice social distancing - click here to view the Social Distancing Guide developed by the Australian Department of Health
  • Make sure your workplace is clean and hygienic
    • Wipe surfaces with disinfectant regularly
    • Examples include: keyboards telephones, desk, equipment, door handles, lift buttons etc 
  • Promote regular and thorough hand washing by employees, contractors and customers
    • Make soap, and sanitiser readily available
    • Include signage to remind people in the workplace to wash their hands
    • Educate people on what good hygiene means – signs, emails
  • Promote good respiratory hygiene
    • Ensure tissues are available for those who have a runny nose or cough, along with closed bins for safe disposal of tissues.
  • Consult national travel advice on Smartraveller before business trips – is it absolutely necessary? 
  • Stay home - Inform employees, contractors and customers that if Coronavirus starts spreading in your community, to stay home and self-isolate. Even if it is a mild cough or low-grade fever.
  • Develop a crisis plan of what to do when someone becomes ill with a suspected case of COVD-19 at your workplace

The WHO has extensive information on managing risk in the workplace - click here to view key recommendations. It is also important to stay up-to-date with Australian Government information:

Now is the time to prepare. Precautions and planning can make a big difference in limiting the spread among the community. Acting now will help protect your employees and your business. Should you have any questions regarding your Business Insurance policy coverage, please contact your Whitbread broker.

T 1300 424 627    E

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World Health organisation:

This insight article is not intended to be personal advice and you should not rely on it as a substitute for any form of personal advice.  Please contact Whitbread Associates Pty Ltd ABN 69 005 490 228 Licence Number: 229092 trading as Whitbread Insurance Brokers for further information or refer to our website.

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