Insurance Claims for Businesses Affected by the Pandemic


After months of speculation and debate, the Business world finally has some clarity around when insurers must pay out for business losses caused by the COVID-19 pandemic. If like many of our clients you have been denied assistance; been unclear on what is covered this guide should help you.

The judgment itself was not entirely unexpected and it did seem to favour the smaller businesses. After all, the fundamental point of insurance is to be insured if something unforeseen happens, and nobody could have predicted the economic chaos brought about by COVID-19.

There will be another hearing on 2 October 2020 on applications for appeal. But in the meantime, the FCA has released a letter setting out its strong expectations of insurers considering the judgments.

In brief, the letter requires prompt payment of claims that are able to be settled and where there are points to be appealed, clear information on the next steps must be given to policyholders. More guidance will be published in the next few weeks and the letter from the FCA can be found through the following link:Download here

The Judgment

The case was centred around the wording of 21 different insurance policies with the view to ascertain whether they covered the losses caused to businesses by COVID-19. The 21 sample wordings are estimated to effect around 370,000 policyholders and 60 insurers.

Although each policy was considered separately, overall, the court favoured the FCA and by-proxy the business relying on the insurance. This is excellent news for many who have suffered during this period and they should now seek to review their policies and resubmit or make claims where they can to help them through this next period

The FCA argued that ‘disease’ and ‘denial of access’ clauses should provide cover for the COVID-19 pandemic. A few other ‘hybrid’ clauses were situation specific. The judgment concluded that most of these clauses did provide cover for the losses suffered through the pandemic, but not all.

The judgment does not issue a blanket liability for all insurers and each policy will need to be considered in detail against the judgment to work out what it means for that policy. Policyholders should expect to hear from their insurers individually. As such we can help make a robust case for many businesses to support this outcome.

Next Steps

Whilst appeals are likely, the court has advised that they will process them very quickly, so the final outcomes of this case can be expected in the next couple of months rather than years. Whilst this case is good news for policyholders, only time will tell if the insurers will reach out to everyone affected. It would be wise for policyholders to check their policy and consider if any of the findings, in this case, are applicable to their policy and to ensure they have a valid claim. We are here to review and help with claims and appeals

We are pleased this judgment supports many of the businesses that took out policies and have been left in the dark