Does your business interruption policy allow for cover in the event of an occurrence of notifiable disease within a 1 or 25 mile radius of your premises?

If your policy does state this inclusion, your business insurer may be obliged to pay you for loss in income arising from your mandatory closure due to the COVID-19 pandemic in 2020/2021.

Many small to medium enterprise business owners in the UK are in the midst of making a loss in income claim to their business insurer right now. Whether those policy holders will receive a pay out or a rejection letter from their insurer depends wholly on the cover they hold and the wording in their policy booklet.

The policy wording to look out for in your policy booklet is the business interruption wording. Solicitors at Specters have been assisting policy holders on business interruption claims since January 2021, when the Supreme Court “leapfrog” appeal judgment of FCA v Arch & Others was handed down.

That judgment was said to be favourable for policyholders. Insurers were advised against delaying payments to policy holders, yet we are seeing that insurers are still proceeding to reject claims wherever they can.

Specters Solicitors are seeing a variety of different terms within the business interruption policy wordings belonging to their clients. Cover can range from standard notifiable diseases clauses which allow for cover in the event of an occurrence “at the premises” or within a certain mile radius such as 1 or 25 miles, to non-damage denial or prevention of access. Each of these clauses comprise of different words, meaning that one of the above clauses in one policy may allow for cover, and possibly not in another policy. Whether a policyholder can claim loss will also depend on the circumstances leading up to their loss. It is recommended that you seek the advice of a legal professional to review your policy wording (and insurance schedule) in full. Any legal advisor should be well briefed on the facts about your business and periods of closure it suffered due to COVID-19.

If your policy wording states that it will cover for loss within a certain radius, such as 1 or 25 miles, then subject to the meaning of notifiable disease (defined by your policy), you should be able to claim loss in revenue suffered due to lockdown from your insurer.

However, your insurer may still try to reject your claim despite your policy wording stating this term. As such, the assistance of a solicitor will help you acquire the necessary evidence required to trigger cover under this term. There are various ways that occurrence of COVID-19 within a certain radius can be proven. Specters Solicitors have detailed knowledge of these methods having studied relevant legalisation, guidance, and the Supreme Court judgment in detail.

Even if your policy does not contain the terms stated above, you should always seek legal advice before you decide whether to make a claim.

You may have another term in your policy which could provide for cover, and accompanied with the help of a solicitor, you can claim for loss in revenue incurred in 2020/2021 due to COVID-19. Any business owner will understand that the future of their business could rise and fall on a business interruption claim, and in addition, policy holders can also claim increased costs of working if their policy allows for it.

Specters Solicitors will review your policy wording and associated documents on a complimentary basis, meaning you will not have to pay for the initial review of documents, or our initial opinion on your potential claim. If we do think you have a claim, we will offer to act for you on a no win no fee basis. So there really is no reason to wait any more time before you seek our advice in relation to your claim.