Does your insurance cover you for business interruption claims?
On 15 September the High Court ruled against insurance companies who refused to pay out to business interruption claims. Are you affected?
Many businesses which were forced to close and/or suffered significant financial loss because of the coronavirus lockdown had their insurance claims refused on the grounds the situation wasn’t covered under their policy.
The Court considered 21 sample policies of the type insurance companies issue to SMEs. It looked at the key clauses which might entitle a business to make a valid claim. They relate to losses resulting from:
- Disease – Cover in consequence of or following or arising from the occurrence of a notifiable disease within a specified radius of the insured premises
- Prevention of access/public authority– Cover where there has been prevention or hindrance of access to or use of the premises as a consequence of government or other authority action or restrictions
- Hybrid conditions- Cover where restrictions are imposed on the policyholders.
- Premises in relation to a notifiable disease
The ruling was that policyholders might be entitled to payment for their losses especially those with policies including the “disease” or “hybrid” clauses.
It seems likely that insurance companies will appeal against the ruling. In the meantime, they should contact all policyholders affected by it within a week or two telling them what they plan to do.
If you don’t hear anything in that time frame contact your insurance company or broker.
How has your business been affected by the coronavirus pandemic? If you are concerned about the financial health of your business, get in touch for a consultation.
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