The FCA is seeking to bring to court as soon as possible what it believes are the key relevant cases which provide the greatest clarity on specific policy clauses to get an independent view on these disputed BI insurance policies if there remains unresolved uncertainty.
“Our intended court action is designed to resolve a selected number of key issues causing uncertainty as promptly as possible and to provide greater clarity for all parties, both insured and insurers,” stated the FCA’s Interim Chief Executive Chris Woolard, “It is clear that decisive action is appropriate given the severity of the potential consequences for customers.
“In addition to this court action, the current emergency has altered the value of some insurance products and we believe that insurers should be looking at both whether their products still offer value. Firms should also look at how they can help customers who may be experiencing financial difficulties as a result of the virus.”
There have been widespread concerns amongst businesses and especially pubs there – as here – about the lack of clarity and certainty on Business Interruption insurance claims.
Research amongst its members by the British Beer & Pub Association found that members met with very little success when trying to claim on their insurance policies.
Of the member companies surveyed that have claimed through either their Business Interruption cover or through their pandemic cover, the BBPA has found there to have been no pay-outs to date.
Some 56% of those applications made through Business Interruption cover have been rejected whilst 44% await an outcome.
For pandemic cover, 67% of applications have been rejected with 33% awaiting an outcome.
Separate research from the British Institute of Innkeepers reveals that just 3% of pub businesses have been successful in receiving a Business Interruption insurance claim.
The intervention from the FCA to increase certainty for pubs making Business Interruption claims was most welcome claimed the BBPA.
“There has been a severe lack of clarity for pubs on Business Interruption insurance claims,” commented BBPA Chief Executive Emma McClarkin, “This had added to the terrible uncertainty our sector faces in what is already a very precarious situation.
“It is simply not right that 56% of pub Business Interruption claims have been rejected whilst 44% still await an outcome.”
She hoped that the FCA announcement would help resolve some of the uncertainty the sector faces in its insurance cover.