Business interruption – a summary of coverage

The global impact of COVID-19 has affected nearly every business for the majority of 2020. Some have had to suspend their operations, go into administration or resume business in a severely limited capacity.

During this time lockdown restrictions have also affected the way people live and work. With a great deal of uncertainty about how long restrictions can last, many business owners are turning to their insurers to find out if and how they are protected by their business interruption (BI) insurance policies.

Many businesses have found themselves without sufficient cover or those that have tried to make a claim have been declined by their insurer. This unprecedented event has put the insurance sector under a global microscope, resulting in the Financial Conduct Authority (FCA) launching its own investigation into how business interruption claims are handled. By inviting insurers and business interruption insurance policyholders into a High Court test case, it is hoped that

Speaking about the test case, FCA interim chief executive Christopher Woolard says, “The court action we are taking is aimed at providing clarity and certainty for everyone involved in these BI disputes, policyholder and insurer alike. We feel it is also the quickest route to this clarity and by covering multiple policies and insurers, it will also be of most use across the market. The identification of a representative sample of policies and the agreement of insurers who underwrite them to participate in these proceedings is a major step forward in progressing the matter to court.”

Over the past year, the Chartered Insurance Institute has published a wide range of materials about business interruption, including research papers, webinars, blogs and lectures. By sharing opinions, insight and knowledge, we aim to support members with improving their knowledge and expertise.

Please see below for a summary of some of the ways we have covered business interruption so far:

• Business Interruption - Policy Wordings by Society of Claims Professionals and Insurance Institute of London (30/05/2019)

• Guidance on coronavirus and business interruption by Richard Graham (19/03/2020)

• CII response to the FCA expectations by Chartered Insurance Institute (20/03/2020)

• Coronavirus claims by Graham Purdon (02/04/2020)

• COVID-19 crisis: Broker professional liability risk management by Flaxmans (08/04/2020)

• Business interruption claims and COVID-19 by CILA Business Interruption Special Interest Group (16/04/2020)

• Coronavirus - Business interruption issues by Damian Glynn (22/04/2020)

• Coronavirus - Can the presence of the virus on surfaces in a building be classed as property damage? by Paul May and Graham Purdon (23/04/2020)

• What happens when the interruption is interrupted? By Flaxmans (24/04/2020)

• CII reacts to FCA action on business interruption insurance by Chartered Insurance Institute (01/05/2020)

• Launch of COVID-19 Brokers Community Interest Group by Society of Insurance Broking (06/05/2020)

• Maintaining public trust during a crisis by Policy and Public Affairs (06/05/2020)

• Managing public expectations in the COVID crisis by Professional Focus and Flaxmans (12/05/2020)

• Business interruption claims - A fragile trust by Flaxmans (27/05/2020)

• Where are we now? - Thoughts from the Society of Claims Professionals by Jeremy Trott (28/05/2020)

• CII reacts to update on FCA test case for business interruption claims by Chartered Insurance Institute (01/06/2020)

• The future of broking – Challenges and conflicts by Flaxmans (02/06/2020)

• Does my business interruption policy cover COVID-19? By Professional Focus and Alan Chandler (16/06/2020)

• Coronavirus – considerations for business interruption insurance by Simon Durkin (08/07/2020)

• The Basic Business Interruption Book by Damian Glynn, Sue Taylor and Steven Nock (17/07/2020)