Businesses face yet further hurdles in claiming on business interruption policies
Judgment has today been handed down in the much-publicised business interruption insurance (BII) case which considered whether various BII policies provided cover in relation to the Covid-19 pandemic.
Fran Tremeer, a solicitor in the Dispute Resolution team at Royds Withy King comments:
“Overall, the case is a welcome decision in favour of policyholders and businesses, with the Court finding in their favour on many key points. However, the Court did not find that all of the insurers involved are liable across all of the limited sample policies it considered. Any policies that were not considered therefore need to be considered against the judgment.
“Whilst the test case has clarified several key questions which will assist policyholders to overcome hurdles when making an insurance claim for business interruption, it is clear that not every policy will cover the Covid-19 pandemic. The FCA has confirmed that affected policyholders should receive an update from their insurers within the next week.
“The Court’s decision has ramifications beyond those who were a party to the action. At least some of the participating insurers have already asked for more time to submit an application for permission to appeal, with the possibility of a leapfrog appeal directly to the Supreme Court. Despite this, we hope that insurers generally will be prompted by the judgment to settle some claims before any appeal is determined, which is likely not to be until 2021.
“The comfort for some businesses will therefore, unfortunately, be short-lived. Despite being in a precarious position since March, businesses will no doubt be frustrated that uncertainty remains.”