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Covid-19 Business Interruption Insurance - you MAY be covered...

22 Sep 2020

In my article in April 2020 I wrote about the challenges facing businesses where their insurers were refusing to pay out on their Business Interruption Insurance.

What has happened?
Since then the Financial Conduct Authority (FCA) has brought a test case against 8 Insurers seeking clarity from the Courts on whether Business Interruption Insurance policies responded to Covid related losses. The test case considered 21 forms of policy wording which fell into 2 categories as follows:

  1. Disease Clauses: which provide cover for business interruption arising from the occurrence of a notifiable disease within a specified radius of the insured premises.
  2. Prevention of Access/Public Authority Clauses: which provide cover where there has been a prevention or hindrance of access to use of the premises as a consequence of the Government or Authority action or restrictions

On 15 September 2020 the Court handed down its judgment.

The results of the test case
It concluded that most but not all of the Disease Clauses in the samples provided cover.

It also found that certain Prevention of Access Clauses in the sample provided cover but it depended on the detailed wording of the clause and how the business was affected by the Government response to the pandemic. As such the wordings for claims under these clauses will need to be reviewed carefully.

The FCA estimate that 370,000 policyholders are likely to be affected by the outcome of the test case. Whilst the judgment is good news for many policyholders, this is not at all straightforward. Each policy will need to be considered in detail to work out what it means for that individual policy.

Policyholders with affected claims are expected to hear from their insurer by today.


In addition, the judgment may be appealed. However, it is hoped that if it is, any appeal will be dealt with quickly.

How can we help
At Hay & Kilner we have experts with many years experience in dealing with Insurance Companies. We help businesses challenge insurance cover decisions.

We would happily review your policy to advise on whether you can now reasonably expect to obtain cover under your Business Interruption clause following the judgment from the Court. We can also assist in presenting your losses to insurers who are likely to scrutinise all claims carefully in light of the number of claims.

If insurers continue to reject the claim, we can assist in submitting your claim to the Financial Ombudsman Service (“FOS”). FOS can only deal with claims made by small businesses and

on claims up to £355,000 but it has the prospect of a quicker decision now that the FCA test case has been heard.

If you would like any further information or help please do not hesitate to contact Tom Whitfield at tom.whitfield@hay-kilner.co.uk who will happily discuss this matter further with you. We are happy to have a short initial discussion free of charge.