Insurance update

The FCA is investigating the wording of 17 different business interruption insurance clauses as they relate to Covid-19. The hearing will reach a conclusion on 20th July.

They are looking at the proximity wording to argue that the virus was everywhere not just local to individual premises. They are looking at the intervention by public authority when the government ordered lockdown, prevention of access (if owners of the business where able to enter does this forfeit the claim?), proximal causation ie was the loss caused just by the disease or the lockdown afterwards? Etc.

One thing to be aware of is that the payments paid in the event of a successful claim are likely to be low, because insurers will look at the realistic loss given the situation ie lockdown and fear of travelling. They will also look at Sweden and see that, despite not having lockdown, hospitality businesses suffered dramatic loss of profit.