The FCA has published guidance for both policyholders and insurance companies to help navigate their respective Business Interruption Insurance claims. The guidance follows the direction of the court, which considered three types of policy wordings:
- Disease outbreak clauses – this provides cover where a business is interrupted as a result of an outbreak within the vicinity of the premises.
- Public authority clauses – this provides cover where access to a business has been hindered or prevented following government, public authority action or restrictions.
- Hybrid clauses – this relates to policies containing wording relating to both restrictions on the business’s premises and the manifestation of a notifiable disease.
The regulators also further set out what the Supreme Court judgment means with respect to claims handling in their ‘Dear CEO’ letter as follows:
- “Cover may be available for partial closure of premises (as well as full closure) and for mandatory closure orders that were not legally binding
- Valid claims should not be reduced because the loss would have resulted in any event from the pandemic
- Two additional policy types provide cover, taking this to a total of 14 wordings from the representative sample of 21”[1]
What does this all mean?
In summary, it remains for the policyholder to consider how the established principles from the detailed Supreme Court judgment apply to their individual business circumstances. It also remains for the policyholder to review their business interruption insurance policy wording in full and establish whether they qualify. The policyholder also needs to calculate their liability and evaluate the loss they have suffered accurately.
How can Connaught Law help me?
If you remain unsure you can always get in touch with us, where we can navigate and assist you in the matter, from start to finish.
We are now also offering a full review of your business interruption insurance policy for a fixed fee. This service will equip you with the merits of the policy, should you wish to make the claim by yourself.
https://www.fca.org.uk/publication/correspondence/dear-ceo-letter-business-interruption-insurance-january-2021.pdf
