The case study produced below is based on the individual merits of one particular business interruption insurance policy. It is not intended to apply to all policies universally.
Background
A business owner got in touch with us and told us that their business had to close as a result of the Government regulations following the Covid-19 climate. The business remained closed throughout periods of lockdown and incurred a loss of profit.
The business owner checked their policy and found they had a valid business interruption insurance policy. Their particular insurance policy provided cover, based on an interruption caused by an occurrence, of a specified illness. The business owner got in touch with their insurer directly, in an attempt to make a claim however, the insurer rejected their claim. The insurer recognised and appreciated the Covid-19 climate had an impact on many businesses. The insurer accepted that the business had been interrupted by the Government’s actions however, Covid-19 was not a specified illness within the policy. On these grounds, the insurer refused to provide cover.
The business owner argued the wording in their policy would provide cover as a result of the occurrence of a specified illness, coupled with the context of closure by a suitable authority.
Outcome
It was found that the insurer had applied their interpretation correctly. Whilst the policy did provide cover under the business interruption insurance for a business where interruption is caused due to the occurrence of certain listed illnesses and diseases, Covid-19 was not on this list. It is argued that Covid-19 did not exist at the time of the policy creation, however, it was deemed unreasonable to allow for a policy to include future illnesses.
What does this all mean?
In summary, it remains for the policyholder to consider how the established principles from the detailed Supreme Court judgment apply to their individual business circumstances. It also remains for the policyholder to review their business interruption insurance policy wording in full and establish whether they qualify. The policyholder also needs to calculate their liability and evaluate the loss they have suffered accurately.
How can Connaught Law help me?
If you remain unsure you can always get in touch with us, where we can navigate and assist you in the matter, from start to finish.
We are now also offering a full review of your business interruption insurance policy for a fixed fee. This service will equip you with the merits of the policy, should you wish to make the claim by yourself.