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It would not be viable for us to cover pandemics, says Ecclesiastical Insurance

23 April 2020

Creative Commons

A parishioner of St Mary the Virgin, Lynton, in Devon (above), tried to make a claim under the business interruption clause

A parishioner of St Mary the Virgin, Lynton, in Devon (above), tried to make a claim under the business interruption clause

A PCC treasurer has been told by Ecclesiastical Insurance that its policies do not cover the coronavirus pandemic.

Mary Woolley, a parochial church councillor for the 13th-century Grade II* listed St Mary the Virgin, Lynton, in Devon, tried to make a claim under the business interruption clause, covering loss of earnings and closure owing to disease. But, when she contacted the insurer, she was turned down.

“They said: ‘No chance on either count. Sorry, but there you go.’ That hit a nerve,” she said. “Ecclesiastical is in a slightly funny position in that it is owned by the Allchurches Trust, which gives money to charity — and we are a charity. It has strong links with the Church of England. Their reaction wasn’t: ‘We can feel your pain.’ It was, rather: ‘We couldn’t possibly help our churches in that way: we wouldn’t be able to afford it.’”

One third of her church’s income is raised through service collections and donations from tourists. “There are two sections in the policy covering lost earnings,” she said. “One was closure by public decree, which seemed to be pretty clear, but the answer was: ‘Ah, yes, but not for disease.’ The other was disease. There is a long and absolutely hilarious list of things for which we would be covered if we closed the church, such as leprosy and smallpox, but, unfortunately for us, Covid-19 wasn’t invented when the list was created.

“The circumstances under which you can make a claim are mostly so remote as to be not worth considering: you don’t get much leprosy in north Devon. We buy an enormous insurance package for the church, which contains all kinds of wonderful things which most churches would rather not have. It does absolutely everything, but it is incredibly expensive. We pay about £5000 a year, but we are paying for something we can’t afford. Insurance is our second biggest cost after the Vicar.

“We’d much rather have a really good, low-cost cover for the crucial, but very basic stuff — people pinching lead or breaking windows — than immensely complicated policies. Ours is 99 pages long: it’s out of all proportion to what the benefits actually are.”

A spokesman for Ecclesiastical said that Covid-19 was not on its list of diseases, “because, in common with the majority of the market, our insurance policies are not designed and priced to cover pandemics. It would have made them unaffordable, as it is simply not economically viable for an insurer to cover such widespread and unknown risks.

“We are working hard to support our customers through this difficult time where we can. We have made enhancements freely available to our cover to support customers, ensuring there are no changes to premium and policy cover for premises forced to temporarily close as a result of Covid-19. Buildings, whether temporarily closed or permanently unoccupied, can be at greater risk from the likes of arson, anti-social behaviour such as vandalism or squatters, theft, and escape of water.

“We are helping customers in financial difficulty by offering interest-free instalments where they have an upcoming annual payment, and we are showing flexibility and support where logistical issues prevent payment. Alongside this, we have produced guidance to help our customers manage their risks during this crisis.”

Ecclesiastical is in contact with parishes, senior clergy, and church officials to discuss specific challenges and risks during the epidemic. “Our team continue to be fully operational and available at this time to discuss any specific issues a church customer may have,” the spokesman said.

It is also working with the Association of British Insurers and the Government to find a way to make sure that pandemic insurance is available in the future.

On the road. The motor insurer Admiral is to refund customers £25 for each vehicle that it has covered during the lockdown. The refund, which will cost the firm £110 million, is possible as fewer drivers are on the road, resulting in a drop in claims.

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