Northwest insurance loss assessing specialist, Major Loss Limited, is urging businesses with Business Interruption (BI) cover in place prior to the Covid-19 pandemic, to not necessarily believe claims for business losses arising from the virus’s impacts would be futile.
There have been various stories about commercial policyholders unable to claim on their commercial insurance policy for loss of profits and increased costs and feeling angry about their insurer’s interpretation of their policy. Whilst it is true many businesses cannot claim, because they bought cheaper protection that will not cover them for Business Interruption in the current circumstances, or which will restrict cover, some policies may pay out.
It is clear from media reports and online activity that BI policy claims are being declined by insurers and their representatives in such a claim – their loss adjusters. But Major Loss and its team of loss assessors is already fighting cases for policyholders whose claims can be championed and which may prove to be successful.
The world of Business Interruption has long been one featuring policy wordings that are confusing and at times contradictory in meaning. A report by The Insurance Institute of London in collaboration with the Chartered Institute of Loss Adjusters (2012) talks of “a lack of clarity for a long time now for insurers, adjusters and customers over certain aspects of BI policies.”
One criticism of many policies is their use of business world terminology, such as Gross Profit, adjudged to mean something different from the calculation that an accountant would use to determine Gross Profit. Lack of clarity also surrounds the word ‘property’ and how that is defined. Some BI policies require the loss to be ‘on the property’, but the definition of this term can be vague.
There could also be challenges relating to the maximum indemnity period and whether or not the length of this was sufficient for the type of business covered and the building from which it operates.
In the current situation, the main reason for declining a claim, if the policy does include a decent level of Business Interruption cover, has been coronavirus itself. Insurers are making judgements on whether or not this is a disease covered by the policy as sold, but these opinions may not be fair and an experienced loss assessor could potentially challenge the insurer’s viewpoint.
If a policy expressly named diseases that it would cover, then Covid-19-related losses will not be covered, as the disease is new. Other policies are more flexible in their classification of ‘notifiable diseases’, however and these could be more widely interpreted.
Then there is the possibility of a claim if the policy has a denial of access clause. Social distancing could be classed as a reason why the business owner cannot access their premises, depending on the way the policy is worded.
Every case is different, so the message from Major Loss is that it would be well worth checking whether or not its loss assessors could fight for a compensation payment, or not.
Major Loss will be looking at aspects such as notifiable diseases, the definitions of certain terms within the policy and also any denial of access policy extensions. They can then advise whether or not they believe a claim is justifiable and fair.
Major Loss director, Andrea Loasby, says: “The insurance and loss assessing sectors have already highlighted the issues that can occur in terms of translating Business Interruption policies for very good reason. There can be vastly different interpretations of elements of cover and exclusions, but most business owners would not pick up on these. Our loss assessors can fight to help make what appear to be eligible and fair claims successful, not in all cases of course but certainly in some.
“Businesses with fluid wording in their policy could be pleasantly surprised by the outcome of a claims challenge. If they do not try to have their point made, they will not know one way or the other.”
For more information about Major Loss Ltd’s service please ring 0808 161 7021.
