Nursery owners can potentially claim under the policy’s loss of revenue section

Insurer Covea could be facing a number of Covid-19 claims through a scheme with childcare insurance specialist Morton Michel, owned by PIB Group.

Covea underwrites Morton Michel’s NurseryCare product, which provides insurance for UK nurseries, kindergartens, sure start centres, Montessori schools and children’s centres – it currently insures around 3,700 childcare facilities nationally.

Insurance Times understands that Covea could now be facing a potentially high claims exposure linked to the coronavirus pandemic, as nurseries insured with Morton Michel that have had to close because of government guidelines can pursue claims under the NurseryCare policy’s clause for loss of revenue.

According to Morton Michel’s policy summary document, advertised on their website, the loss of revenue clause “covers [the] loss of gross revenue resulting from interruption of or interference with your business following loss or damage to property at your premises. Reasonable costs incurred to maintain the business following such loss or damage are included”.

Within this section, there are two areas that policyholders could pinpoint in order to receive a claim pay out.

  • Government or local authority action – covers access to the premises being hindered or prevented as a result of the actions or advice of a government or local authority following an emergency which is likely to endanger life or property, up to £100,000.
  • Compulsory closure – compulsory closure by a public body preventing or restricting access to your premises after discovery of a notifiable human infectious or contagious disease at the premises, or an occurrence of a notifiable human infectious or contagious disease within 25 miles of the premises.

Each compulsory closure trigger provides “up to £100,000 in any period of insurance”.

According to the policy documents, these identify significant policy exclusions and limitations as: “any interruption of or interference with the business not caused by damage other than as described in compulsory closure, essential employees, government or local authority action, national lottery, public utilities ‘accidental failure’ and suspension of employees.”

Morton Michel is in the process of setting up an online claim form specifically relating to its NurseryCare policy, according to the National Day Nurseries Association (NDNA).

A post on the association’s website said: “We understand Morton Michel is setting up a NurseryCare online claim form to help providers make a speedier claim than trying to do so via telephone.

“Depending on your own policy and level of cover you may be able to claim under extension seven in the loss of revenue section of the policy.”

Both Covea and Morton Michel declined to comment when contacted by Insurance Times.