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Updated - 19th January 2021

The Supreme Court delivered its judgment on the Financial Conduct Authority’s (FCA)’s Business Interruption Insurance Test Case, on Friday the 15th January 2021. The legal process is now completed and the action settles the position with regards coverage, causation and the application of trends clauses.  It also provided the clarity that many have been after, as to the extent to which Business Interruption coverage is available under a selection of ‘non-damage’ Business Interruption extensions within certain policy wordings.  However, it should be noted that the issue is a complex one and the ruling does not mean that all Insurers, whatever the policy wording, will pay Business Interruption claims due to Covid-19.  It also, does not guarantee the level of claim payments to be made, if applicable. Not all Insurers were involved in the process and some will remain unaffected. The media appear to have reported “blanket” cover acceptance across the industry and this is simply, not the case.  Each Insurer will be affected in different ways based on the legal interpretation of the respective policy wording and each claim will be taken on its merits.

This article is not intended to explain all the details of the ruling (please review the FCA website link for precise detail on this subject: https://www.fca.org.uk/news/press-releases/supreme-court-judgment-business-interruption-insurance-test-case ) but more to, provide guidance on what our valued Policyholders need to know and what to do, at this stage.  We do expect that the FCA will publish further guidance to Policyholders and identify what they expect Insurers/Intermediaries to do, to manage clients expectations and communications. What we do know however, is that Insurers will need to act quickly and efficiently. We as a Broker, will aim to facilitate this in every possible way and ensure we communicate to our valued customers quickly and regularly.

The guidelines below apply to all Policyholders based in England and Wales.  If you are a policyholder based in Scotland, Northern Ireland and or Republic of Ireland, please email combus@balens.co.uk and clearly state you are Policyholder based in one of the above territories.  Decisions on the legal stance, in these territories, is still unclear at this stage, each case will need to be handled on its merits.  We have established a dedicated team within Balens to handle all Covid related claims and / or queries.

We have listed below, the main type of Policies that Balens source and provide to our customers.  We are also providing details of who to contact with queries and what process to follow:

Bridge Business Protection Policyholders

Covéa Insurance PLC (Covéa), the insurer for these policies, are currently reviewing the findings of the Supreme Court ruling and how this will affect their interpretation of policy cover.  At this stage, we do not know if they will aim to revise their decision as “at premises” wordings were not subject to the Appeal hearing.  They will need time to review the ruling and seek legal advice.  We have naturally, applied pressure for the final decision to be made urgently and we expect to hear soon.  A formal stance will be obtained that can be forwarded to all Policyholders, as appropriate.

In the meantime, you may find yourself in one of the following scenarios, so please review and respond accordingly:

Scenario one -  You have an ongoing claim with Covéa (already reported and recorded)

Covéa will continue to correspond with you directly – you do not need to do anything further at this stage.

Scenario two – you have previously submitted an enquiry regarding policy cover or submitted a claim and you have been told that the policy will not respond

Please email Combus@balens.co.uk.  Please provide full details of your contact details, the Policyholder’s name & address and your Policy Number (if known).  Details of the claim to be submitted should also be provided.   Our dedicated “Covid-19” team will review your details, note your intention and contact you, as appropriate.

Please note, that the submission of an enquiry or claim, does not guarantee any claims settlement, as such you may choose to wait until Covéa have formally responded to Balens, before asking for a claim to be submitted. Delaying a submission will not affect your rights.

Scenario three - you wish to submit a potential new claim

Please email Combus@balens.co.uk.  Please provide full details of your contact details, the Policyholder’s name & address and your Policy Number (if known).  Details of the claim to be submitted should also be provided.   Our dedicated” Covid-19” team will review your details, note your intention and contact you, as appropriate.

Please note, that the submission of an enquiry or claim, does not guarantee any claims settlement, as such you may choose to wait until Covéa have formally responded to Balens, before asking for a claim to be submitted. Delaying a submission will not affect your rights.

China Heath Products Package Policy

The Cover for loss of income, under this package policy is specified disease cover, which sets out an exhaustive list of diseases which are covered by the Policy.  Covid-19 is not one of the covered diseases.  Therefore, Insures have clearly stated that claims due to Covid-19 will not be entertained.  The FCA test case is not considering policies which only cover a specified list of diseases and the recent appeal has not changed anything.  We are expecting a formal stance from China Taiping Insurance(UK) Company Limited (China) in due course.  In the meantime, if you have any queries, please email: combus@balens.co.uk

If you have an ongoing claim, our dedicated Claims Team will contact you with the Insurers decision on your claim submission, in due course.

Bridge Babtac Package Policyholders

The position here has remained unchanged – please see our previous article - https://www.balens.co.uk/news/business-interruption-insurance-bridge-policies-via-covéa-insurance-plc-updated-30th-july-2020.aspx

The downloadable letter from Covéa Insurance PLC available on this page also clarifies their formal stance.

Any other Insurer

Balens sources polices for our clients from a range of insurers that include Business Protection cover, including Hiscox Ltd, Markel Corporation and others.  Once again, each claim will be considered on its merits and subject to the terms and conditions of the policy.  It is likely that the respective Insurers will be contacting us, your Insurance Broker, or you directly to clarify what the next steps are.  Our dedicated Claims Team will be on hand to assist you.  Please email Combus@balens.co.uk if you have any queries.

Many Insurers do have websites that provide information on this complex subject and/or dedicated claims lines that provide useful information for you.  It may be worth reviewing their content for additional information and/or support.

It should be noted that we are experiencing a high volume of enquiries at this present moment in time and our phone lines are only manned Monday, Wednesday and Friday – 9.30am – 4.30pm.  Correspondence via email is therefore, the most effective way of contacting us.  Please do not be concerned that your claim may be affected, if you do not receive an immediate response.  Your claim will not be prejudiced, should there be a slight delay in communication. We are in unprecedented times.

Finally, we are fully aware that the last year has been extremely challenging and stressful for many of you.  We thank you for your patience and co-operation during this time.  Balens are dedicated to doing everything possible to support our valued customers at this time.