Coronavirus-Related Business Interruption Insurance Claims

Broadly speaking, Business Interruption Insurance covers businesses for losses incurred due to various unexpected events, such as fires, floods etc. Over the last few years the pandemic has undoubtedly caused a huge amount of disruption and financial turmoil for thousands of small businesses, yet the majority of insurance providers were warning their customers that their policies would not cover covid-related losses.

The Financial Conduct Authority (FCA) has been appealing this notion, bringing a test case forward to the High Court and then the Supreme Court. In January 2021, the Supreme Court “substantially allowed” this appeal, meaning that many businesses will now be able to claim for covid-related losses under their Business Interruption Insurance. You can find the full press release via FCA’s website.

Businesses Can Claim For Covid-Related Losses

The Supreme Court’s judgment means that thousands of businesses will now be eligible to claim for losses caused as a result of the pandemic. In FCA’s press release, Sheldon Mills (the FCA’s Executive Director, Consumers and Competition) made the following statement:

“Coronavirus is causing substantial loss and distress to businesses and many are under immense financial strain to stay afloat. This test case involved complex legal issues. Our aim throughout this test case has been to get clarity for as wide a range of parties as possible, as quickly as possible, and today’s judgment decisively removes many of the roadblocks to claims by policyholders.

“We will be working with insurers to ensure that they now move quickly to pay claims that the judgment says should be paid, making interim payments wherever possible. Insurers should also communicate directly and quickly with policyholders who have made claims affected by the judgment to explain next steps.

“As we have recognised from the start of this case, tens of thousands of small firms and potentially hundreds of thousands of jobs are relying on this. We are grateful to the Supreme Court for delivering the judgment quickly. The speed with which it was reached reflects well on all parties.”

How To Claim

The FCA provides a range of useful fact sheets to help guide businesses through the process and understand when and if they’re eligible to make a claim. You can use their policy checker to find out whether your insurer should cover your claim.

The FCA’s general FAQs page also provides clear advice on how to claim and what you can claim for, along with other useful information. Before you submit your claim, you may wish to seek an accountant’s advice to ensure that you have considered every cost that you should be covered for. To get the ball rolling, contact us via our website and one of our friendly, knowledgeable and experienced accountants will be in touch.

What If My Insurer Rejects My Claim?

If you think that your insurer has incorrectly rejected your claim, your first port of call should be to make a complaint to your insurance company (it can take 8 weeks to receive a final response from your insurer). If you’re still unhappy with the outcome after this, you can make a complaint to the Financial Ombudsman Service who will review your complaint and make a decision regarding your claim. This service is free and straightforward – you can find out more via the Financial Ombudsman Service website.