The recent High Court judgment in Euro Accessories Limited  EWHC 47 (Ch) has shed some light on the interpretation of “fair value” for a compulsory transfer initiated by a...
Business customers backed by FCA in seeking clarity on business interruption insurance
The economic disruption caused by the COVID-19 pandemic has led to large numbers of business customers making claims under their business interruption insurance policies to cover their losses. However, in doing so, many have raised issues over the lack of clarity in the decision-making process and doubts over the success of claims made under the current circumstances. Generally, such claims only prove successful if physical damage has been incurred to the insured premises.
The diversity of policy details, ambiguity of wording and range of cover options available is adding to the confusion over the validity of claims. Consequently, many who thought they had legitimate claims have seen them being dismissed by their insurers.
This situation has prompted the Financial Conduct Authority (FCA) to take steps to bring urgent declaratory proceedings through the Courts in relation to business interruption insurance in order to clarify policy terms for commercial landlords and tenants as soon as possible. The FCA intends to engage with policyholders and insurance intermediaries as part of this approach and the plan would involve putting cases before the Courts on an agreed basis with the insurers concerned
The FCA is urging insurers to reflect on the value of their products in relation to the current disruption and consider their response accordingly. It has also provided additional guidance to help business customers experience difficulty in paying their insurance premiums during the crisis, advising them to contact their insurance providers to discuss the options available.
Some high-profile insurance providers are already facing the threat of legal action from customers whose claims have been rejected and we will continue to monitor and report on any proceedings on this issue as they arise.