The vast majority of UK businesses will be unable to make a claim if they are forced to close due to coronavirus, an insurance industry trade body has warned.
Restaurants and bars have warned that, without financial support from the government, mass unemployment and businesses will collapse.
Some firms have been critical of the decision not to announce "enforced closure", which would have triggered payouts from insurers for those with cover.
The Association of British Insurers (ABI) confirmed payouts will not happen without an "enforced closure" notice, but said this was irrelevant for the vast majority of businesses because they are unlikely to have purchased cover providing for an infectious disease, such as Covid-19.
An ABI spokesperson said: "Irrespective of whether or not the Government order closure of a business, the vast majority of firms won’t have purchased cover that will enable them to claim on their insurance to compensate for their business being closed by the coronavirus.
"Standard business interruption cover – the type the majority of businesses purchase – does not include forced closure by authorities as it is intended to respond to physical damage at the property which results in the business being unable to continue to trade.
"A small minority of typically larger firms might have purchased an extension to their cover for closure due to any infectious disease.
"In this instance an enforced closure could help them make the claim, but this will depend on the precise nature of the cover they have purchased so they should check with their insurer or broker to see if they are covered."
The statement comes after the chief executive of the leisure industry trade body, UKHospitality, called the Government announcement “catastrophic for businesses and jobs”.
Kate Nicholls added: “The government has effectively shut the hospitality industry without any support, and this announcement will lead to thousands of businesses closing their doors for good, and hundreds of thousands of job losses.”
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