Since its outbreak COVID-19 has caused on-going financial difficulties for most if not all of us, and especially UK businesses and companies. Following the guidance issued by the Government on lockdown and social distancing measures, many businesses have had to close premises and seen a sharp decline in profits. Accordingly, and with the passing into law in early March 2020 that Covid-19 was to be added to the list of notifiable diseases, many businesses will be reviewing their policies of insurance to see if they are entitled to submit a claim for the losses arising out of such business interruption.
Any business looking to present such a claim to an insurer first needs to ensure that the nature of the claim falls within the relevant terms and conditions of the policy of insurance. It is usual for certain specific events to be identified which, if you suffer loss as a result, the policy will cover. For example, policies of insurance often include cover for business interruption that has been caused by a flood or by other physical damage to property. However, it is far less common for policies to provide specific insurance cover or an extension to any general cover for pandemics and other notifiable diseases. Many businesses may find that they are not covered for business interruption loss due to Covid-19, but it is critical to check the specific wording of your policy.
However, some insurance policies might provide cover for loss of income due to closures of business premises because of other reasons like non-damage related prevention of access or one imposed by any civil or statutory authority or by order of the government. Careful consideration should be given to the specific wording of your policy.
If a policy provides cover and you believe you will be entitled to submit a claim for such losses, make sure that the insurer is notified correctly in accordance with the notification procedure of the policy to avoid the insurer trying to reject any such claim on a technical ground. Also check to see whether the policy provides a cap on the sum the insurer is required to pay for your claim. While the Financial Conduct Authority (FCA) has confirmed that it expects insurers to process and pay successful claims as soon as possible, insurance companies will undoubtedly push back on these claims given the likely volume of the claims and potential sums to be paid out.
If you are making little or no progress with your claim or you would simply like your policy wording to be reviewed, we can assist. If a claim has been rejected the only recourse to overturn that decision is via the Court or other such litigation process or if eligible by approaching the Financial Ombudsman. There are criteria which a business needs to satisfy to be able to approach the Ombudsman, a time limit within which to make such a claim and if the criteria are satisfied there is a cap on the amount of damages it can award.
There still remains a lack of certainty as to whether claims will satisfy the business interruption wording of polices.
If you believe that you might need assistance with any such claim or policy wording review do not hesitate to contact the Dispute and Resolution team at Jolliffes which is more than willing and able to help. Stewart Burrows can be contacted on firstname.lastname@example.org or on 07711596121.