Take a good look at your insurance – sadly, most businesses are not going to be covered for losses due to COVID-19, but some are. Check your policy carefully and if you think you may be covered, notify of a claim. You will need to mitigate your losses by taking advantage of the schemes on offer and you should carefully document your costs. Additionally, if you have unoccupied premises, check what your obligations are in relation to making the property safe and secure. You may need to do some simple things like turning off the electricity supply or there may be more complex requirements such as boarding-up shop fronts.
Think about cyber-security for your business information and any personal data, staff are processing – it is generally ok for data to be processed from home but you are obligated to have appropriate technological and organisational security measures in place. A balance between the cost of additional cyber-security and the risk to personal data needs to be found. Document your decisions carefully as these may be reviewed later if a breach does occur. There has been a spike in cyber-crime as fraudsters pray on anxieties. Remind your staff to be vigilant and ultra-cautious. Staff should never email any business or personal data to a personal email address.
Be cautious about new commercial opportunities – the nature of wants and needs has changed in the last few weeks, and new commercial opportunities arise as a consequence. Don’t be pressured into a commercial agreement without properly reviewing the details and ensuring you are protected. Document your agreements and include as much detail as possible. If a deal looks too good to be true, it probably is.
Dealing with contracts that cannot be completed – check what your agreements say about events beyond your control. This will usually be called “force majeure.” Read the definition of force majeure and be certain it applies to a pandemic. The clause will not generally mean that payers are excused from paying, because COVID-19 does not prevent parties from making payments. If there is no clause that deals with events beyond your control, the law of frustration may apply, which will discharge the parties from their obligations subject to recovery of expenses.
Be realistic about the start back to work. The supply chain for most industries will be heavily disrupted and will take time to get back to normal service. Social distancing and continued staff absence will make you less efficient. Start thinking about your sale and supply contracts – do these need adjusting to deal with longer lead times, lower production capacity and more stringent working practices? Speak to your counter-parties about how you envisage the return to work will be impacted and redefine your obligations in these terms. Consider whether a formal variation agreement to terms is needed and if so how this must be done. Some agreements require these to be in writing in order to be binding.