More than 30 SPFL clubs face insurance pay-out blow over ‘contagious diseases’ clause

Effects of shutdown begin to be felt

Like all clubs up and down the country, Hearts have closed the gates at their Tynecastle stadium. Picture: Paul Devlin/SNS

Several clubs have discovered that they are not due to receive payouts for business interruption caused by “labour disputes or infectious or contagious diseases” following advice from the SPFL to check the terms of any insurance policies they may hold.

The news underlines the financial pressure on the Scottish game as the effects of a potentially long-term shutdown due to the coronavirus outbreak begin to be felt.

With no matches in the foreseeable future, clubs are being denied income from gate money while still having to pay staff.

Hearts have already asked employees to take a 50 per cent pay cut.

The SPFL recommended an insurance firm to cover clubs for events including interruption of or interference with the business.

In a section relating to denial of access to premises, clubs who have this particular policy are covered to a limit of £500,000 “excluding any consequence of labour disputes or infectious or contagious diseases”.

One chief executive of a Championship club who has a policy with the firm in question said he would not be surprised if most clubs were in the same position.

Indeed, The Scotsman understands only six clubs in the top four divisions are covered for the current extremely unlikely set of circumstances.

However, in order for the policy to pay out there would need to be a decision to either end the season now or continue to play behind closed doors. An announcement from Uefa on Tuesday confirmed the intention for domestic seasons to be completed by the end of June. This plan was almost immediately described as “unrealistic” by SFA chief executive Ian Maxwell, among others.

Resuming the season at a later date would not result in a payout for those few clubs fortunate to have insurance which covers business interruption due to a pandemic.

But for the majority of clubs, it does not matter whatever happens. They are not due anything in any case despite being effectively forced to shut down their business operations for an unspecified period.

“It’s not the SPFL’s fault,” said the Championship club chief executive. “It would be highly unlikely many clubs are insured because infectious and contagious diseases are not included in the insurance policies taken out by most of the clubs in Scotland.

“That’s not unreasonable from us – I don’t think it’s the club’s fault, nor is it the league’s fault. It’s a global pandemic. Who could have foreseen that? But the absence of cover does have more serious financial implications.”

A chairman of a League One club confirmed they were in the same boat. “We were talking about this with the directors earlier and we will go through the small print but we very much doubt there would be anything there for us in terms of a pay out,” he said. “We are certainly not banking on it.”