Check your Insurance Policy for Business Interruption Claims

The impacts of COVID-19 on small businesses has been far reaching, with mandated closures and disruptions leading to substantial financial losses. Many businesses will have therefore looked to the business interruption options in their insurance policies to offset some of the losses. If you have not done so, you may wish to review your policies with your provider and/or broker to see if you have the relevant cover for such a pandemic.

We know from conversations with many of our clients that there has been confusion over the wordings of some policies, leading to rejection of claims.  A legal ruling, made in September, following a test case taken to the UK courts by the Financial Conduct Authority, is bringing some hope to claimants who have previously been denied coverage, for losses as a result of the pandemic. The insurers have appealed this decision and this appeal is currently sitting with the Supreme Court.  This is still delaying pay-out on some claims, but the ruling from the Supreme Court is expected no later than January 2021.

We have recently received some positive news in relation to, self-catering businesses who hold policies with the NFU. The NFU, similar to other insurers, considered the government’s COVID-19 Small Business Grant Fund grants as income when calculating any claims for loss of profit.  As a result, the NFU were deducting these grants from any pay outs they made.

We are now aware that the NFU are no longer deducting grants, and will be refunding retained grants to holders of their Home & Lifestyle Policy with Holiday Cottage Loss of Profits Extension, where they had the “Infectious Diseases” wording, the Home and Lifestyle Plus and some Bespoke policies.

The NFU should be contacting those affected.  If you have not claimed because your claim was less than the amount of your grant it may be worthwhile resubmitting a claim.  Also, although this may not apply to everyone, we would recommend that all businesses whether they have or have not made an insurance claim, been refused a payment or received a reduced payment check their policy schedule or check with the broker you purchased the policy from.

The Professional Association of Self-Caterers (PASC) has been lobbying in connection with the NFU policies and if you are a self-catering business you may want to check their website for more information.