Some business owners who assumed their business interruption cover would protect against losses due to the COVID 19 pandemic were disappointed to learn from their insurer that they were not covered – even if their policy had a disease clause (infectious or notifiable diseases) and a non-damage denial of access clause (such as public authority closures or restrictions).
Complaints from policyholders flooded into the FCA and prompted an investigation and an urgent test case to clarify the situation. Eight different insurers, including Hiscox and Zurich, who had resisted claims under their business interruption cover, submitted examples of their policy wording alongside their justification as to why they felt this pandemic was excluded from their policy cover.
On the 15 September the FCA found broadly in favour of the policyholders, rather than the insurers, stating that:
As always the devil is in the detail and each business owner’s situation will be different. The FCA have told insurers that even if they are looking to appeal the FCA decision they must inform their policyholders about the judgement and prepare to meet claims.
Find out more about the FCA Test Case on Business Interruption Cover
The cookie settings on this website are set to "allow cookies" to give you the best browsing experience possible. If you continue to use this website without changing your cookie settings or you click "Accept" below then you are consenting to this.