UK Insurers are tightening the terms of their business coverage to explicitly exclude anything related to the coronavirus pandemic.

Although the outbreak is already excluded from many policies, The Financial Times has reported that insurers have been closing any remaining loopholes on contracts up for renewal on 1 April.

One insurer has introduced a blanket exclusion for any loss relating directly or indirectly to a communicable disease, and another has altered the rules about “denial of access” cover to exclude diseases.

“It seems like a pretty bleak day for the Industry,” Bruce Hepburn, CEO of claims specialist Mactavish told the FT. “They don’t have to take this stance. They could take a premium for it and provide the cover.”

He added that the rush to alter contracts at this late stage was probably due to “a lot of grey areas” in existing contracts, and that requests for information from rating agencies and regulators may have raised concerns that insurers will “have to take a conciliatory approach to some of the claims that are coming through.”

Since the outbreak, many operators attempting to claim on their insurance have found that the unprecedented cause of closure meant they were not covered under existing policies.

Last week, BDO partner Peter Hemington told MCA that with insurers refusing to pay, the government needed to compensate businesses for losses arising out of the coronavirus pandemic.

“There’s no point in borrowing a load of money, and then in six months’ time you have loads of debt on the balance sheet,” he said. “The government needs to compensate for loss of business, and step in as an insurer of last resort, if insurance schemes don’t cover them.”