Business interruption insurance is intended to cover financial losses when a business cannot function normally due to unexpected events, such as natural disasters, fires, or, as experienced recently, a pandemic.
The COVID-19 pandemic posed extraordinary challenges to businesses throughout the UK. Many were forced to close or significantly reduce their operations due to lockdowns and restrictions. As a result, numerous companies turned to their Business Interruption (BI) insurance policies to seek compensation for their losses. However, many insurers refused to honour these claims, citing various exclusions in policies and relying on case law.
There is, evidently, an issue in how insurance companies are interpreting policy wording, which is leading to cover being unfairly denied for business interruptions caused by Covid-19. A practice which needs to be actively challenged.
In September 2024, the Court of Appeal ruled in favour of policyholders in a landmark case concerning business interruption (BI) insurance claims. This decision clarifies the ambiguities within insurance policies, confirming that most claimants are indeed entitled to compensation for losses incurred during the pandemic.
How do you determine if you have a valid claim?
If your business was affected by the pandemic, you may still be eligible to submit a claim under your business interruption insurance.
Chris Guy, RLK’s Head of Insurance Litigation, outlines the key criteria for qualification:
- You must have had a valid insurance policy in place in March 2020.
- You should be able to demonstrate a COVID-19 case within the vicinity of your premises to activate the policy.
- You will need to provide evidence of the financial loss your business experienced.
What You Should Do Next
BI claims can involve extensive documentation, so it’s crucial to gather all of the information you possibly can to support your claim.
Although strict time limits apply, businesses may still have until March 2026 to file a claim, depending on their individual circumstances and policy terms. In reality, claimants should act sooner rather than later, as procedural deadlines mean there may be as little as one year remaining to initiate these claims.
It’s crucial to find a solicitor who can guide you through the complexities of the entire process. Having a team with the necessary skills and expertise will significantly improve your chances of success.
If you had a policy with insurers such as Accredited, Ageas, Allianz, Arch, ArgoGlobal, Aviva, AXA, Brit Syndicate, Canopius, Hiscox, Liberty Mutual, MS Amlin, QBE, or RSA in 2020, you could be eligible for a claim.
About RLK
Since March 2020, RLK Solicitors have been at the forefront of challenging insurance companies that wrongly denied cover for business interruptions caused by Covid-19. RLK have acted for thousands of business owners, helping them secure the insurance cover and compensation they deserve. The firm led groundbreaking test litigation, such as the Salon Gold Award case, and continue to be involved in significant cases which are further evolving the Covid-19 BI arena.
Call 0121 450 7800 or email lucy@rlksolicitors.com to discuss your circumstances and ensure you claim everything as a business owner you are entitled to.
UK Court of Appeal Rules in Favour of Businesses (rlksolicitors.com)