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ADVICE: Claiming Business Interruption insurance

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*written by Assured Hotels

The Supreme Court judgement in favour of the FCA’s appeals, and therefore policy holders, on the 15th of January finally brought some good news to our beleaguered industry, thus giving much needed clarity to clear the roadblocks created by the pandemic on Business Interruption insurance claims. This remains a complex issue and the full FCA press release can be read here on the dedicated FCA website here.

It’s worth noting at this point that the appeal judgements differ from those reached by the High Court and the actual test case in September. Firstly, with the unanimous dismissal of appeals brought by the panel of insurers but for different reasons than the High Court.

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Further positives can be taken where the Supreme Court allowed all four of the FCA’s appeals and two on a qualified basis. This gives specific guidance on the key effect of the pandemic which influences interpretation of common policy wordings and therefore claims. For example, disease clauses and the link between losses and a notifiable disease and complete clarity in a date when cover should be provided from. Specifically, losses were incurred after Boris Johnson issued the government’s instruction to “stay at home” (so far as it applies to the insured’s business) on 20th March 2020, rather than when it was enshrined in law almost a week later.

The judgment does not determine how much is payable under individual policies, but provides the basis for doing so, and whilst this concludes the legal process in favour of policy holders there is still work to do before much needed claims are paid to individual businesses. On the update page we can see that the FCA have issued a Dear CEO letter which sets out a lot of useful information including the FCA’s clear expectations of insurers and their agents following the judgement.

Can we claim Business Interruption from our insurer?

Even where there was an initial refusal to a previous claim any policy holder with the relevant cover in their policy should contact their broker who will assist in the process, however as the FCA’s efforts have proved through the courts this support has not been forthcoming from all parties. For balance we have also seen many situations with full support given, indeed some claims were encouraged very early, and loss adjusters appointed by the insurance carrier in lieu of an expected positive judgement.

Assured Hotels have a long track record of BI claims, and any business owner who has ever undertaken BI claims will be all too aware of the need for extensive detailed data analysis backed by commentary and trend interpretation to build the required structure to aid a successful claim.  Our many years of experience in successful claims for clients, and our impartiality from the trading business enables us to expedite the process and maximise your claim.

We have therefore stayed very close to this issue right from the first lockdown in March 2020, where we initially experienced some push back on behalf of our clients from their insurer. We have since assessed multiple policy wordings with support of insurance & legal experts we work with and used our operational knowledge to calculate claims now to be submitted across over 20 different properties.  We are therefore well placed to support any hospitality business, from a standalone restaurant or pub to a group of large hotels by running the following process:

Cover – Check the policy clauses, understanding the detailed wording of BI cover is critical as this will affect the structure and value of any claim.

Claims value – If we believe the above could facilitate a valid claim then we have developed a method to calculate a claims value quickly from the management information available.

So please lean on our experience of this issue as we may be able to assist, and initially on a pro-bono basis in an assessment of a case. An open and honest confidential discussion with us would cost nothing, and it just might give the cash flow forecast the different complexion required to support a survival plan.

During the past 10 months we have worked on other asset value preservation initiatives, please see our website for other support  during lockdown or planning for recovery amongst other resources.

Supporting Stakeholders – meet with us on a no obligation basis

In direct response to ongoing challenges faced by the hotel & hospitality sector Assured hotels will be offering no obligation meeting time to sector stakeholders.

We will be providing access to our senior team to discuss any challenges. We have made our significant experience and resources available without charge to cover all main disciplines of finance & forecasting, procurement, sales and revenue management, plus funding and government support access.

We will endeavour to answer any question raised, so please click here to book a meeting 

email mgriffin@assuredhotels.co.uk  or call 0203 205 7239.

Tags : Assured Hotelsbusiness insurancehotels
Zoe Monk

The author Zoe Monk

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