1813 Club and Premier Members
What the FCA ruling will mean for claims during the pandemic
The Covid-19 crisis led to many businesses claiming on their insurance to cover the interruption they have suffered – but the insurers were reluctant to pay out, so after a high volume of complaints, the Financial Conduct Authority (FCA) asked the High Court to make a ruling on the issue.
Richard Coates (pictured),
resolution partner at Freeths in Birmingham analyses the ruling and says that businesses that were originally denied on a claim may still be able to get redress.
1. What happened in the High Court test case? Judgment on the case was handed down on 15 September, with the High Court finding in favour of the FCA (and therefore the policyholders) on the majority of the key issues. The claim triggers under many
‘disease’ and ‘hybrid’ clauses, and certain ‘denial of access/public authority’ clauses, as well as others, were found to have been engaged.
2. Which insurance companies/policies were considered by the High Court? Arch, Argenta, Ecclesiastical, Hiscox, MS Almin, QBE, RSA and Zurich agreed to participate in the case. The Court considered the sample policies across those insurers, which contained the types of clauses that policyholders have claimed under, such as non- damage business interruption and denial/prevention of access.
3. What if my policy wasn’t analysed by the Court – what should I do? Your policy could still be affected by the High Court decision even if it wasn’t part of the test case.
4. I’ve already raised this issue with my insurer and they have refused to make any payment. Many insurers have declined claims for Covid-19 business interruption. However, the High Court ruling
means that some of those decisions were wrong and insurers will need to reconsider.
5. I’ve already raised this issue with my broker and they have told me that I don’t have a claim. Brokers, like insurers, have made decisions and given advice on the basis of their interpretation of insurance policies. The High Court has
indicated that some of those interpretations and decisions were wrong, and some policies should respond to the claims.
6. If my policy is included in the judgment, what should I do? If your specific policy wording was considered in the test case, the High Court has now given a clear indication as to how your claim should be considered and dealt with by your insurer. The FCA guidance indicates that
insurers should contact affected customers. If you have a claim, however, and have not been contacted by your insurer within seven days, you are still able to pursue your claim.
7. How should the value of my claim be calculated? The judgment does not determine how much is payable under individual policies, but provides much of the basis for doing so. Each claim will need to be considered alongside the policy and the judgment to ascertain any sum due to the policyholder.
8. How long will this take? Some or all of the insurers may seek to appeal the decision, although they have already agreed that any appeals will be expedited. In the meantime, insurers are able to deal with and settle claims that are presented if they choose to do so.
9. Is there a time limit for me to bring a claim? Each insurance policy will contain
rules about time limits in which to notify insurers about a claim. Do not delay if you think you have a valid claim.
10. Who should I talk to? We are able to review your policy and the circumstances of your
claim and to advise whether you are likely to have a claim that your insurer should accept. We can also help present your claim, including the value of your claim and in the presentation of financial evidence, with a view to aiding a swift resolution.
Freeths makes best firms list
Law firm Freeths has been recognised again in ‘The Times’ annual ‘Best Law Firms’ list for 2021. The table comprises the top
200 firms across England and Wales, and the top 40 in Scotland. These have all been chosen by
lawyers, who were asked to recommend law firms across 26 categories, covering business, public and private client sectors. Freeths has been commended
in 11 areas, including commercial dispute resolution, commercial property, clinical negligence, company and commercial and employment. Philippa Dempster, senior
partner, said: “It is always a good feeling to be recognised by our peers for the work we do and to retain our place in the list. “Well done to all of our lawyers
who work so hard for our clients, and help us continue to achieve success.”
December 2020/January 2021 CHAMBERLINK 41
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