News

Business Interruption Insurance and Revenue Protection Insurance: Are you really covered for COVID-19?

Table of Contents

Large sways of businesses remain closed following Government intervention relating to the control of the Coronavirus COVID-19 Pandemic in the UK.

Whilst the Government have put in place various measures with a view to supporting businesses, in many cases businesses are suffering as a result of complete loss of their revenue.

This position has had many business owners dusting off their insurance policy documents to see whether they first have Business Interruption Insurance (or Revenue Protection Insurance) and whether it will assist them in the circumstances.

Unfortunately, it is becoming increasingly clear that the big insurers are less than enthusiastic about having to pay out under the policies.

Should my Insurer pay out?

Whether you, as a business owner, are in fact covered for your lost revenue in the circumstances is dictated almost solely by the actual wording contained in your policy document – which usually consists of a schedule of cover together with a detailed terms and conditions document (the policy document).

The wording of the policies will vary widely between Insurers – with some providing cover where there has been Government intervention enforcing businesses to shut and others providing for cover specifically for contagious outbreaks of disease.

You should first examine, in detail, the wording of the policy document and the schedule to see whether it is likely that you will be covered in the circumstances.

If I am covered, what am I covered for?

The amount that you may be able to claim under your insurance policy is dictated, normally, by the information set out in the schedule document. That often sets out the maximum limit of the insurance pay-out and will briefly detail the exclusions from the cover (but will then refer to the policy itself for specific descriptions etc).

What happens if the policy terms are unclear to me?

How the Courts are likely to interpret the various differing clauses in business insurance policies remains to be seen. Looking at previous case law, the modern approach to the interpretations of terms in insurance contracts is one where the Court will look to the natural meaning of the wording and will only be willing to depart from the natural meaning where the words and their use are unclear.

How do I claim?

You should look to your policy first to see whether there are any time limits or methods that you need to employ to make a claim under the insurance policy itself, so as to ensure that you do not default on the same.

If there are no specific statements as to how you should make your claim, generally there is no legal framework for how claims ought to be made and should the Insurer refuse to pay out then there will be a number of legal options open to business owners, should they believe that they ought to have paid out, including Court proceedings and claims being made to the Financial Ombudsman Service.

But I believe that I would be covered?

If you believe that your Broker has done something or ought to have done something which has resulted in you not being able to claim under the insurance policy, in circumstances where you believe you ought to be able to do so, then potentially you may have an action against your Broker in respect of professional negligence. Of course, you would need to think about what it was the Broker was asked to do and why you believe your Broker has been negligent in their duty towards you/breached the contract with you and that will be very case fact specific.

Free review of your policy documents

At Astle Paterson we would be more than willing to assist you in respect of obtaining payment for your business from your insurance policy and are willing to look over you documentation on a free of charge basis to thereafter provide you with swift and sound legal advice as to your likely chances of succeeding in a potential claim being made under the insurance policy itself or against the Insurer, should that prove necessary.