Business Interruption Insurance – Are You Covered? (FREE Insurance Policy Review)
Recruitment businesses taking out insurance cover are unlikely to have considered the wording of the Business Interruption clauses in their policy. In these times of difficulty, maybe we can bring you some good news.
One of Optima’s shareholders and business consultants, Adrian Learer FCA, has for the last few years specialised as a Forensic Accountant, calculating and negotiating Business Interruption (“BI”) claims on behalf of many businesses in conjunction with Insurance Claim Negotiators with over 60 years’ combined experience.
Combining this general BI expertise with our in-depth knowledge of the financial workings of recruitment businesses, we are ideally placed to assist with any opportunity for you to make a claim. Insurers may try to dispute whether you are covered and/or the date from which losses arising from Covid 19 can be claimed. Our experts are very aware of this and are used to negotiating with insurers to get the best possible results for their clients.
These are unprecedented times; we are all facing uncharted territory and insurers will approach each claim with caution, whilst the Government clarify their position and how they expect insurers to act. However, where businesses have suffered losses and it can be shown that there is a basis for a BI claim, we may be able to secure payments on account from insurers whilst the full extent of the losses are being established. This could prove the difference between a business surviving or failing.
FREE Insurance Policy Review
Our experts will be happy to review your insurance policy FREE OF CHARGE, after which we will provide initial advice on whether we believe you have the basis of a BI claim. If you would like us to do this for you, please email your Schedule of Cover and Policy Wording to firstname.lastname@example.org. If we believe there is a claim to be made, we will be pleased to handle all aspects of the claim on your behalf on a NO-WIN NO-FEE basis.
Adrian Learer has prepared some brief guidance below, giving some insight into the areas of uncertainty for both claimants and insurers at present, as a result of which our experts could be the difference between a claim being successful or being rejected:
The first challenge in establishing a BI claim is determining the trigger for coverage. Insured parties will need to examine any business insurance extensions available, or the existence of standalone contingent BI cover. In some cases, express Infectious Disease cover may be provided. If not, other extensions, for example Suppliers and Customers, Denial of Access and Loss of Attraction covers may all be relevant, but the availability of cover will be entirely dependent on an analysis of the factual cause of the loss in the context of the specific wording.
Some policies provide cover for losses caused by any ‘notifiable’ disease, which may give rise to difficulties in the case of a novel disease that does not become notifiable until some way into the period of loss. First, losses suffered before the date on which the disease became notifiable will most probably be challenged. The starting point for establishing the amount of profit lost would be the period after the advent of the disease, but before the disease became notifiable, not the period before the first incidence of the disease.
COVID-19 became notifiable in Scotland on 22 February 2020, and in Northern Ireland on 29 February 2020, whilst in England the authorities only took the decision to make it notifiable on 5 March 2020. The wording of any policy will therefore need to be checked carefully to establish which date acts as an effective trigger for BI cover. If multiple triggers apply, calculating the amount of covered loss will be complex and no doubt contentious, given the staggered approach in different regions of the country.
Even where broad coverage for notifiable diseases is provided, policies may include an express list of excluded diseases. There might be catch-all language such as ‘or any mutant variant thereof.’ Conversely, some policies provide cover for a specified list of infectious diseases, rather than any notifiable disease. The medical definition or categorisation of the disease will no doubt give rise to disputes over coverage.
Where cover for BI losses is established, there will inevitably be disputes over causation and measurement of loss. Even where a business is forced to close or scale down its operations, there will be arguments over to what extent the losses are caused by the immediate effects on the business, rather than the effects on the wider marketplace and the absence of customers. We can therefore anticipate ‘wide area damage’ type arguments being raised by insurer.
Hopefully businesses will be able to weather the storm before relevant claims are processed, but it is important to note that whilst a temporarily closed business will be able to claim, the business entity must still remain in existence.
We will be pleased to assist you in this technical area with a FREE OF CHARGE review of your insurance cover. Get in touch