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Dealing with “loss of business” insurance claims due to COVID-19

Supreme Court backs small firms over business interruption insurance claims

On the 15th January 2021 the Supreme Court handed down its judgment in relation to the nature and extent of cover afforded to businesses under Business Interruption insurance clauses.  Whilst the Supreme Court could only reasonably consider a relatively small number of insurance policy wordings, it is anticipated that similar standard wordings exist across a wider pool of some 700 types of policies with the potential for this judgment to affect around 370,000 small businesses.

The Supreme Court has determined the proper interpretation of four types of clauses commonly found in business interruption policies.  These are:

  1. ‘Disease clauses’ – clauses which generally provide cover for business interruption losses resulting from the occurrence of a notifiable disease, or at a specified distance of the business premises;
  2. ‘Prevention of access clauses’ – clauses which generally provide cover resulting from public authority intervention preventing or hindering access to or use of the business premises;
  3. ‘Hybrid clauses’ – clauses which combine disease and prevention of access clauses; and
  4. ‘Trends clauses’ – clauses which generally provide for business interruption loss to be quantified by reference to what the performance of the business would have been had the insured peril not occurred.

The Supreme Court’s judgment on how widely these clauses ought to be interpreted in relation to COVID-19 is favourable to policyholders, meaning that it is not now the case that claims will only be paid in a very narrow set of circumstances.

 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.

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