Thousands of businesses may not be able to claim for losses incurred by the coronavirus outbreak, despite the reclassification of the disease.
On Wednesday the government said it would declare coronavirus as a "notifiable disease", a classification required by many insurance policies.
But the Association of British Insurers says most business insurance policies are still "unlikely" to cover losses.
Many policies will only cover firms if the virus is found on-site.
Several insurers are telling customers that they should check the detail of their policy to see whether they are covered.
It has left businesses worried about expected virus-related losses.
Lara Lloyd from Totnes in Devon runs residential art courses and trips abroad. Her family-run business, Coombe Farm Studios, has already had a number of cancellations.
Her insurer told her that they would pay for loss of profits caused by the occurrence of disease on-site, and then only if the premises are closed on the order or advice of "a competent authority".
Financial blow to business
The firm's customer base is largely older, and Lara says that they are holding off on bookings because they are concerned about the outbreak and making travel plans for the coming months.
Precautionary cancellations by nervous customers are not covered by her policy.
The move gives important powers to local authorities, and acts as an important trigger for insurance against losses known as "business interruption cover".
But the ABI urged holders to check the small print of their policies.
"An insurance policy is a contract and any cover is defined in the wording of that contract," a spokesman told the BBC.
They added that "it may be possible to buy consequential business interruption cover for notifiable diseases as an extension to a business insurance policy.
"Standard business insurance policies are designed and priced to cover standard risks, not those that are very unlikely, such as the effects of Covid-19."
If the insurance industry maintains this line, it will be another significant financial blow to businesses. They may also have to foot the bill for the extension of statutory sick pay of £94.25 a week to cover coronavirus-related illness and absence from day one, rather than day four.