Many Business Interruption Insurance (BII) policies provide cover where there is a case of disease at the insured premises. On this page, we set out our approach to complaints about insurance claims for business interruption caused by Covid-19 "at the premises".
What is "at the premises" cover in a BII policy?
Many BII policies provide cover where there is a case of disease at the insured premises.
Policies vary significantly in their terms but, typically, in the context of the Covid-19 pandemic the policy requires the interruption to have been caused by the occurrence or a manifestation of Covid-19 at the premises.
In some policies, cover is dependent on the presence at the premises of a disease from a list of specified diseases, which typically doesn’t include Covid-19. In such cases, we are likely to decide that the policy doesn’t provide cover in the context of the Covid-19 pandemic.
In other policies, cover is dependent on the presence at the premises of any infectious disease or a notifiable disease, but the policy does not include an exhaustive list of diseases. We would usually interpret these types of policy to include Covid-19.
What we look at
When we consider a complaint, we want to determine what is fair and reasonable in all the circumstances of the individual complaint. There are many different types of BII policy, each of which has different relevant terms, and the circumstances of each complaint are different. The information provided on this page sets out some of the things we consider in relation to complaints about "at the premises" cover specifically:
Demonstrating a case of Covid-19 "at the premises"
It is for the customer ("the claimant") to provide evidence which supports their claim.
Although there were many cases of Covid-19 in the UK in March 2020, there was not widespread testing and many other viruses with similar symptoms, such as flu and colds, continued to circulate. For us to determine that, on the balance of probabilities, there was a person with Covid-19 at the premises in the relevant period prior to the interruption, we would require good evidence that Covid-19 was present and not another disease.
So far, we have seen very few claims where that evidence has been provided. We have issued many decisions where we have not upheld the complaint because there has been insufficient evidence to demonstrate a case of Covid-19 at the premises in the relevant period.
The Supreme Court judgment
The Supreme Court did not consider ‘at the premises’ policies in the test case brought by the FCA. However, it did consider policies which require a case of Covid-19 within a specified radius of the insured premises (for example, within a mile or 25 miles of the premises).
The Supreme Court found that, in principle, each case of Covid-19 within the specified radius of the premises which had occurred in the relevant period prior to the government measures to restrict transmission could be a contributing cause of those measures. Policyholders could therefore recover the losses caused throughout the period of interruption caused by those measures (subject to any limits in the policy).
In our view, the causative effect of a case at the premises can be the same as that of a case within a radius of the premises, and therefore the period of cover provided by an ‘at the premises’ policy can also be the duration of the government measures – rather than, for example, a short period for cleaning. We will consider the individual facts of each case, as well as the policy wording, before reaching a decision.
It has been necessary for us to form a view on the application of the Supreme Court judgment to ‘at the premises’ policies in order to resolve the disputes brought to us, but we will continue to review this position in light of any further court decisions or guidance which is issued.
Here are a selection of final decisions provided as indicative examples of our current thinking. Individual cases are decided on their own facts and based on what we think is fair and reasonable, accounting for the unique circumstances of each case we receive.
Examples of cases we did not uphold:
- E's complaint about Royal & Sun Alliance Insurance Plc
- Mr H's complaint about Royal & Sun Alliance Insurance Plc
- W's complaint about Allianz Insurance Plc
- B's complaint about Society of Lloyds
- Miss A's complaint about Liberty Mutual Insurance Europe SE
- N's complaint about QIC Europe Ltd
- U's complaint about Society of Lloyds
- N's complaint about Ageas Insurance Limited
An example of a case we upheld:
We publish the final decisions issued by our ombudsmen. You can search all decisions in our decisions database . We anonymise our decisions and write them in a way that prevents the person or small business complaining from being identified.
The Business Support Hub
If you’re an insurer or broker and want to talk informally about a complaint you’ve received, you can speak to our Business Support Hub. Our Business Support Hub can give you general information on how the ombudsman might look at a particular complaint. We also offer guidance on our rules and how we work.
Find out how to contact the Busiuness Support Hub.
Information for small businesses
If you’re a small business customer looking for information about how we can help with a complaint, you can read more about our general approach to Business Interruption Insurance and how to complain.