Coronavirus: Are you seeking financial relief? Check your insurance policy

Jody Proudman, a solicitor in Harrison Drury’s property litigation team, offers alternative ways to help business owners seek financial support during the coronavirus COVID-19 pandemic.

Updated April 30, 2020

Many businesses are utilising the government’s package of assistance measures in order to provide some financial protection against the effects of the COVID-19 pandemic on their business. But for some businesses it may not be the most immediate or easiest solution or support to receive.

We are hearing that some businesses’ claims submitted to the Coronavirus Job Retention Scheme (CJRS) that was set up to protect employees, have been rejected or delayed. The government also introduced the Coronavirus Business Interruption Loan Scheme (CBILS) but it is not available to all businesses. Even if the criteria is met for the loan scheme, there is no automatic guarantee of approval, as each financial loan provider retains its discretion on these decisions.

The government’s Self-Employment Income Support Scheme designed to support the self-employed and partners in business, is not yet operational to make claims. The HMRC is expected to contact applicants by mid May 2020 with a view to making payments by early June 2020.

Seeking alternative financial relief

In light of these shortcomings, businesses must ensure to consider any other potential options available to them to remain financially operational and not be wholly reliant on receiving financial assistance from the government. This could include recovering losses made during this period, for example, under insurance policies claims.

This equally applies to landlords who may have the benefit of rent protection cover, particularly if their tenants are no longer paying rent yet are currently protected from forfeiture. Self-employed individuals may have insurance cover with clauses regarding being unable to carry out their work.

The Financial Conduct Authority (FCA) recently issued guidance to insurers setting out that it expects them to treat customers fairly and pay valid claims quickly. However, the FCA has not yet introduced any requirement for insurers to meet all claims regardless of validity and it seems highly unlikely that it will do so.

Whether or not a claim is covered within a policy will therefore greatly depend upon the wording of the policy, so careful scrutiny of the policy is necessary and highly recommended to determine this.

For example, business interruption cover may not be triggered under a compulsory closure clause due to a notifiable disease, but may, instead, be available under a denial of access clause.

How we can help make it possible

Harrison Drury has significant experience in dealing with business and commercial insurance claims. To help businesses determine their eligibility to make a financial claim from an existing policy, we offer a fixed fee service of £750 plus VAT.

Examining the insurance documents will help to determine the cover available and our team will then offer detailed advice on the possible outcomes.

We can also:

• Advise upon the merits of challenging an insurer where a claim has been rejected.
• Consider whether the conclusions reached by brokers in respect of cover are correct.
• Advise whether a broker potentially has liability where a business and/or individual faces a lack of cover.

As it is usually a condition of insurance cover that claims are notified to the insurer promptly, it is crucial that we are contacted as soon as possible in order to assess your eligibility to make a claim.

For a review of your existing business insurance policies or to discuss your current situation regarding business financial support, contact Harrison Drury’s property litigation team on 01772 258321.