There are 2 facets to a Business Interruption Insurance claim:
(1) A specific and defined event, outlined in your overarching insurance policy or clearly defined within a standalone case, must cause your business to suffer lost revenue.

(2) This event must cause the business to shut down in whole or in part.

This insurance coverage will last until the end of the business interruption period. This period is the date that the covered event began until the date that the damaged property is physically repaired and restored to its initial position prior to the disaster. While this period is determined by the specific insurance policy, the Insurance Information Institute has specified this to be 30 days, with a possible extension to 360 days under an endorsement.

 

Business Interruption Insurance will offer full compensation for all expenses incurred during the restoration of your business. The following are typically covered under a BII policy:
(1) Profits that would have been earned.
(2) Operating expenses and costs incurred by the property (based on financial records and historical costs)
(3) Expenses incurred for moving to, and operating from, a temporary location
(4) Training costs for new machinery following the insured event
(5) Reimbursement for reasonable expenses which allow the business to continue operation while the property is being restored
(6) Compensation for Government mandated closures of the premises which include loss of revenue

To start your claim with us, complete the free assessment form on this page. We will then ask you to e-mail a copy of your insurance policy to us. We will assess this and analyse whether you have a claim as part of our free initial assessment. Our solicitors will aim to be in touch within 2 business days.

The two key elements to a business interruption police are:
(1) The time period for which the interruption will affect the business (the indemnity period)
o The ‘indemnity period’ is the period for which the business is affected by the interruption caused by the damage. This period is limited to the maximum allotted time period selected by the policy holder. In determining this period, the policy holder must take into account the type of business, the time taken to replace specialist machinery, the types of customer and other factors that may have an impact upon the speed of a firm’s recovery to its initial trading position.

(2) The maximum amount that needs to be insured (the Gross Profit)
o The business interruption policy only needs to cover the policy holder’s net profit and fixed expenses.
o In order to calculate the Gross Profit, the insurer will deduct variable and uninsured working expenses from the turnover, as variable charges (purchase of raw materials and working supplies) will reduce due to the reduction in turnover.
o In short, this type of cover requires the policy holder to estimate the gross profit for the upcoming year, and insurers apply a one-third uplift in order to take account of any future growth in turnover.

In addition to these elements, cover is provided for all types of loss or destruction/damage to the property, provided that the cause is not specifically included from the policy.

A standard BII policy only covers losses which are a result of insured damage at the insured’s own premises. However, if damage to a third party’s premises causes the policy holder’s business to become affected, then there are a variety of extensions which may be exercised.

The most common extensions include:
(1) Losses resulting from damage at the premises of suppliers
(2) Losses resulting from damage at the premises of named customers.
(3) Losses resulting from damage to the property of the insured whilst in transit
(4) Losses resulting from access to an insured’s premises being prevented due to damage to nearby premises.
(5) Losses resulting from damage at the premises of a public utility
(6) Losses due to the occurrence of a notifiable disease, vermin, defective sanitary arrangements, murder and suicide.

Within this case, the court considered three broad categories of BII policies:
(1) Disease wordings: This provides cover for losses arising from the occurrence of a notifiable disease within a specific radius of the insured premises. COVID-19 was made a notifiable disease in England and Wales on 5 March 2020, and SARSCoV-2 was made a ‘causative agent’.

(2) Hybrid wordings: This provides cover for BI losses sustained where restrictions have been imposed on the insured premises in relation to a notifiable disease.

(3) Prevention of access / public authority wordings: This provides cover for losses sustained where access to the insured premises has been prevented or hindered as a consequence of authority restrictions due to an emergency in the vicinity of the insured premises.

The Supreme Court confirmed that disease wordings provide cover for Business Interruption losses arising from at least one case of COVID-19 within the specific geographical radius of the premises from which business is conducted.

The Supreme Court also confirmed that there must be an ‘inability’ to use the premises, rather than something less. This may be satisfied where a policyholder is unable to use the premises for a discrete business activity or unable to use part of the premises for its business activities. A ‘restriction imposed’ by a public authority must carry the threat of legal compulsion and must be reasonably understood by the public that it must be complied with.

Overall, the Supreme Court makes cover more readily available for policyholders under the prevention of access and hybrid clauses within the insurance agreements. Therefore, this decisions widens the scope for claimants to recover losses as a result of the COVID-19 pandemic and the public health measures taken by the UK authorities.

The only insurers legally bound by this decision are the 8 companies that took part within their specific policies which were reviewed by the court. However, all insurers must follow this judgment and if a claim was initiated, then the lower courts would use the Supreme Court ruling and enforce it.

However, each insurer offers a range of different policies, which may differ according to the ones which were examined by the Supreme Court. Therefore, it is best to check your policy in light of this judgment in order to analyse whether a claim is available.

Generally speaking, insurance policies with a ‘closed link’ definition of disease will allow you to make a claim. There must be a specific definition that indicates that COVID-19 may be a factor that will allow an insurance payout.

Moreover, there may be claims present within multiple clauses of your agreement. As demonstrated within the Supreme Court’s Judgment, a claim could be initiated through ‘Prevention of Access’ clauses, as opposed so a Disease clause.

Overall, the definitions within the insurance document are vital to assessing whether COVID-19 falls within the parameters of your agreement.

Firstly, you should inspect your policy to check whether you are covered under your specific insurance policy.

If your insurance broker or insurance provider previously informed you that you were not covered, then their advice is likely to have been based on the position prior to the Supreme Court judgment being handed down. Therefore, their stance may have changed as a result of this case.

Insurance policies have specific time limits for notifying your insurer of a potential claim. Therefore, do not hesitate to get in contact with our lawyers at Charles Lyndon and your insurance provider if you believe that you may have a claim.

After you have filled out our initial survey, we shall contact you to discuss your claim. In order to assess your insurance policy, we will need to inspect your insurance policy documents that are relevant during the forced closure of your business due to the COVID-19 pandemic. This will be the period from March 2020 onwards.

These documents will include:
(1) Insurance certificate
(2) Your Full Insurance Policy
(3) Your Policy Schedule

The coverage provided by a policy is not confined to the date the policy lapsed. If the schedule provides indemnity for 24 months in the policy schedule then it covers the 24 months regardless of the policy lapsing.

If the client cancelled the policy prior to it lapsing then it would continue to cover the client but there will likely be deductions for the period of time that any specified premiums were not paid.

It is necessary, in order to move forward with a claim, that you obtain the policy wording document from a link emailed to them, as the policy wording may have changed since they first took out the policy. It is therefore essential that the original policy documentation be acquired.

If you are unable to locate these relevant documents, then contact your insurance company in order to receive another copy. They have a duty to provide these to you.

If you believe that there is still merit to your claim despite this initial rejection, our Solicitors will evaluate your claim and offer the chance to pursue legal action against them.

At Charles Lyndon, we operate on a ‘No Win, No Fee’ basis, and we are happy to assess your insurance policy to examine whether your claim is substantial enough for a claim.

Yes, this is advisable. Our solicitors cannot take instruction from an employee of the company because they do not have the necessary authority. Therefore, in the majority of cases, the person initiating the claim must be someone with significant control of the company, like an Executive, a Chief Financial Officer or a Director.

We welcome all forms of claim, provided that you feel that your business has suffered as a result of an external disaster, or has suffered as a result of the COVID-19 pandemic. Many businesses will have disrupted as a result of recent times, ranging from the hospitality sector, to the retail sector. Therefore, if you feel that you may be eligible for a claim, we advise you to fill out our survey to benefit from a free initial assessment of your insurance policy and overall claim.

Our solicitors have particular expertise within this area of law and are well-equipped to guide you through the overall process, ensuring that you receive proper compensation.

Our legal experts at Charles Lyndon will contact your regarding your case and keep you suitably updated as your case proceeds. You will deal directly with our solicitors, and if you have any questions, feel free to contact us on 0207 058 0050.

At Charles Lyndon, we operate on a ‘No Win, No Fee’ basis, meaning that you will only pay a fee if your claim is successful. This fee is limited to 30% of your damages. This will be the only fee we take throughout our representation of your case.

We welcome all forms of claim, provided that you feel that your business has suffered as a result of an external disaster, or has suffered as a result of the COVID-19 pandemic. Many businesses will have disrupted as a result of recent times, ranging from the hospitality sector, to the retail sector. Therefore, if you feel that you may be eligible for a claim, we advise you to fill out our survey to benefit from a free initial assessment of your insurance policy and overall claim.

It is incredibly hard for us to give an exact time period as to when you will receive your compensation. However, we can ensure that our expert lawyers will work efficiently and diligently on your case to ensure that the overall process is handled both effectively and swiftly.