FINANCE
Business interruption insurance and Covid-19
Companies with business interruption insurance policies may be in line for a significant payout after a landmark Supreme Court judgement sided with policyholders in a test case brought by the Financial Conduct Authority (FCA) due to the impact of Covid-19 lockdowns. Chris Mallett (pictured), associate director at independent insurance broker Aston Lark’s Derby office, explains the ruling.
On 15 January, the Supreme Court handed down the final judgement on whether certain business interruption clauses respond to Covid-19. Its ruling means some businesses – although
not all – can now successfully claim for the impact of coronavirus. This only applies to businesses with infectious
disease clauses in their policies. Unfortunately, the majority of business interruption policies don’t include these specific clauses and this means for many businesses, no cover applies. As much as the judgement is good news for
some, the wide variety of language found across different insurers’ wordings means all businesses should seek individual advice on where they stand.
BACKGROUND TO FCA TEST CASE The FCA test case considered 21 sample policy wordings from eight insurers, included due to the existence of the following specific clauses: • Infectious diseases • Prevention of access • “Hybrid” clauses that combine elements of disease and prevention of access
Following the original judgement handed
down by the High Court in September 2020, the Supreme Court ruled on appeals from both insurers and the FCA, and the relevant points are summarised below.
Infectious diseases: The Supreme Court judgement upholds the original High Court ruling that these clauses – which refer to an outbreak of infectious disease within a certain radius of a policyholder’s premises – should provide cover if you can prove a single occurrence of Covid-19 within a specified radius prior to lockdown restrictions being imposed.
Prevention of access: The High Court view that no cover is provided under these clauses was reaffirmed.
“Hybrid” clauses: For businesses ordered to close by Government, there should be some cover. The Supreme Court extended the High Court’s view, allowing claims where firms weren’t able to use part of their premises due to Government order.
WHAT TO DO NEXT Each insurer will now need to consider how
the judgement applies to their customers and those able to claim should be quickly identified and contacted by their insurer or broker. Claims could be affected by when your
business closed and whether you were able to change your activities, such as restaurants setting up takeaway services. You should get in touch with your broker in
the first instance to discuss what the judgement means for you and what the claims process involves. The broker should be able to advise whether you’re covered and if so, support you with gathering the information you’ll need to successfully claim.
As a Chamber strategic partner, Aston Lark is offering affected Chamber members a free discussion about the next steps with their business interruption insurance claim. Contact
derby.enquiries@astonlark.com
Financial planner is one to watch
Emma Baumback (pictured), of Future Life Wealth Management, has been named among the top 35 “next generation” of financial advisers in the country. The 29-year-old was included in the list compiled by New Model
Adviser in recognition of her efforts to become a qualified financial planner while also helping vulnerable people during lockdown with shopping, collecting prescriptions and gardening. Emma said: “Many people said I was too young to be a financial
planner or, even worse, I didn’t look the part. So passing the exams, becoming an adviser and now being listed in the top 35 is a vindication of all that. But the hard work hasn’t stopped. It’s not easy being a young female adviser in this industry, but it is 100% worth it.” She was helped along the way by Future Life’s managing director
Jillian Thomas, who sent Emma on a leadership course and then promoted her from paraplanner to financial planner. Jillian said: “The average financial planner is male and 58. So I believe in
bringing through the next generation – if only because there will be nobody left in the industry if we don’t do that. Emma showed potential and she has achieved amazing results. And I know there is more to come.”
82 business network February 2021
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