An official of the Philippine Business Council – Qatar (PBC-Q) has underscored the need of getting business interruption insurance coverage as part of a company’s total risk mitigation preparedness.
The impact of the novel coronavirus (Covid-19) pandemic on the business community is widespread and unprecedented, leaving many companies struggling to cope with many challenges, such as daily loss of income, said PBC-Q chairman Greg Loayon.
According to Loayon, companies in Qatar should consider getting covered by business interruption insurance apart from the usual insurance coverages for fire, disaster, theft and fraud, among others.
“Companies that do not have business interruption insurance could suffer from a painful experience in this current situation because they lack this type of coverage, Loayon told Gulf Times.
“Most companies will insure against fires, earthquake, and potential damage from disasters, if any. They also have a health or accident insurance in one form or another but if business is interrupted for any reason then who is going to pay for the company’s losses for that day or for a prolonged period?
“Having this overall type of insurance is part of the total risk mitigation preparedness of a company, which is why there has to be a full risk mitigation analysis for companies,” Loayon pointed out.
Citing establishments that were shut down because of the pandemic, Loayon emphasised that “these companies cannot collect anything from their insurance because they are not covered for this type of risk.”
If a company is properly insured, Loayon noted that businesses are not forced to lay-off or streamline its workforce during situations like a pandemic “because they have prepared for this type of scenario.”
“All companies regardless of size need business interruption insurance because they are at risk of any type of unforeseen incident. Fire insurance would cover for damages to property but it does not include income losses that the company would incur during the period when it is trying to recover from the fire. That’s business interruption because the company is still not operational,” he explained.
He said companies can get a risk professional to look at potential threats to the business and how these risks could be mitigated. “There are specialised insurance companies that could handle a specific type of coverage or service,” he noted.
Aside from exploring different business continuity and risk mitigation programmes, Loayon added that a company should also look at IT and logistics infrastructure, as well as other areas that could be covered by insurance.