Business Insurance

Has your claim for business interruption insurance been rejected?

Insurers are coming under increasing pressure for refusing to pay out claims to companies that have been devastated by COVID-19. So much so that the Financial Conduct Authority (FCA) has vowed to take insurance companies to court and some insurers are facing class-action lawsuits from businesses.

Despite some business interruption insurance policies having very clear wording that a claim can be made if an infectious disease forces them to close, many insurance companies are rejecting claims en masse, with some citing that COVID-19 is not covered as it is a new disease or that the impact of lockdown is not covered by the policy.

Does your business interruption policy provide cover?

Most business interruption policies cover standard risks only, such as fire and flooding, etc. but you may have chosen to purchase additional cover or a ‘notifiable disease extension’ specifically for disruption caused by pandemics and infectious diseases.

Most notifiable disease extensions tend to cover specific diseases that will be named in the policy. If Covid-19 is not specified, then cover may not apply. Some extensions are more general and do not specify certain diseases. Business owners should, therefore, check the policy wording very carefully.

Cover may also exist if the business has purchased a ‘non-damage denial of access’ extension. Purchase of these extensions tends to be rare and not generally covered under standard policies. Generally, ‘denial of access’ cover applies to cordoned off areas and loss of trade resulting from a denial of access to premises. If a business is forced to close or is told to close by an appropriate authority or is cordoned off, this could trigger a claim under a ‘non-damage, denial of access’ extension, if the infectious disease cover is unspecified or if it includes Covid-19.

What should home improvement companies do if their business interruption insurance claim is rejected?

If you believe your policy does provide cover, but your claim has been rejected, we urge you to contact us for guidance.

At QASSS, we can help with the claims process and can arrange access for home improvement companies to a Loss Adjusting service, should you need independent advice regarding complex, major or difficult claims.

To find out more about this specialist service, contact Scott Robinson our Commercial Director on 0161 676 0919.