Covid-19 and Business Interruption Insurance

The Financial Conduction Authority brought a test case to assess whether or not a variety of insurance policy wording for non-damage business interruption cover provided cover due to Covid-19.  According to the FCA, most SME policies for business interruption are focused on property damage but some also provide business interruption cover for ‘denial of access’ or due to infectious disease.  With Covid-19 affecting almost every business, there has been uncertainty and disputes between policy holders and insurers on how such non-damage business interruption insurance applies.

There were eight different insurers who volunteered to be part of the case and some 21 different types of sample policy wording that was assessed.

Not all 21 types of policy wording were decided to provide Covid-19 cover but most ‘disease’ cover does and some ‘denial of access’ cover also does – but the specific policy wording needs to be considered individually against what the court has decided.

The FCA has advised that if you have an insurance claim affected by this decision that you can expect to hear from your insurer shortly.  The FCA nor the insurers involved have yet to announce if there will be an appeal.