LITIGATION

Business Interruption Insurance Claims

As we begin to take steps to gradually come out of lockdown many businesses will have relied on the prospect of availing of their business interruption policies to try and offset the substantial level of loss. However, businesses are discovering that their claims under this policy are being rejected due to ambiguity in existing policies. Many found that even if they had taken out infectious disease cover, it was only applicable if the disease was on their premises not a global pandemic as the policy failed to include a material damage proviso and only extended to physical damage.

Dr Caoimhe Archibald, chair of the Northern Ireland Economy Committee, questioned whether the insurance industry was exploiting ambiguities and taking an intransigent approach to paying COVID-19 related business interruption claims. The Association of British Insurers published guidance stating that they believe that insurance for business interruption relating to COVID-19 is “likely to be rare.” The Financial Conduct Authority has recently taken up a test case in the High Court in London to establish greater clarity for both policy holders and insurers by providing persuasive guidance for the reading of analogous policy phrasings and claims. The test case is due to be heard between 20th and 23rd July and 27th and 30th July and will be legally binding on the insurers named as parties.

The Insurance industry body ABI reported that ABI members expect to pay £900 million in business interruption claims due to the pandemic which gives rise to hope that some businesses may not be shut out from protection.

If you are uncertain whether you can make a claim or for more information on how Millar McCall Wylie can help with your Business Interruption Losses please contact Caroline Prunty on 02890200050 or email caroline.prunty@mmwlegal.com.

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