FCA Business Interruption Test Case Update

***This page was last updated 28 January 2021 (1045hrs)***

FCA Business Interruption Test case update

With the Coronavirus pandemic causing so much disruption, many customers have considered if they can claim for Business Interruption (BI). We know this is a difficult time for them, and it may be stressful for you too – we appreciate you’re handling more enquiries than usual.

Unfortunately, there’s a lot of variation in the types of BI cover provided by different insurers, and the wordings of that paperwork are necessarily complex. This has led to concerns about a lack of clarity.

Following the Supreme Court BI ruling on Friday 15 January 2021

The business interruption test case shows the importance of insurance as a safety net for commercial customers and we welcome the clarity provided by both the High Court and, now, the Supreme Court. Ageas was not a party to the proceedings and we continue to support businesses whose policies cover them for the impact of COVID-19.

We’re confident that our handling of claims during this difficult time has been fully aligned to our policy wordings and that our customers have been treated fairly. As a result, there hasn’t been a material change to how we handle any claims.

If you or your customer believes they have a valid claim under the terms of their policy- then please report the claim as outlined within their policy documentation.

Non-damage BI claims

To help you discuss potential non-damage BI claims with your customers, we have summarised our standard policy BI coverage below:

Loss of income

Our policies don’t provide cover for loss of income due to such things as; market conditions, reduction in consumer confidence & spending, economic downturn.

Occurrence of a notifiable disease at the premises

If there is evidence that an occurrence of COVID-19 at the premises was the cause of the loss, we do have extensions for this on a number of our core products (such as Shopkeepers, Leisure, Homeworkers & Office) and a number of our bespoke Schemes. However our Commercial Choice & Property Owners policy wordings contain a specified list of notifiable diseases and Coronavirus is not named. Please check the specific policy wording before submitting a claim

Abandonment and Event cancellation

This cover isn’t included in our standard products. Some of our bespoke Schemes do offer this cover and we’ve been working with policyholders and the relevant brokers on those claims.

Public Authority Orders & Prevention of access

Some of our bespoke Schemes do offer this cover and we’ve been working with policyholders and the relevant brokers on those claims.

FCA Business Interruption Test Case

As a recap, the Financial Conduct Authority (FCA) asked that insurers make policyholders (with non-damage BI claims) aware that the FCA is seeking legal clarity through the means of a ‘test case’. The outcome of the test case aimed to resolve any contractual uncertainty around the validity of BI claims.

The Judgment on the test case was published on 15 September 2020.

To ensure we are doing the right thing for our customers, and in accordance with the FCA’s requirements, we completed a comprehensive review of all non-damage BI policy wordings.

Informing your customers

In accordance with the requirements, last year we wrote to a very small number of policyholders with COVID-19 related non-damage BI claims or complaints which we previously determined could be potentially affected by the test case outcome. Where we have written to the customer, we have also notified the relevant broker. 

Please visit the FCA’s website for more information.