During this current Covid 19 crisis, Tower continues to provide an essential service to our Customers and Brokers during these unprecedented times.
On 15th January 2021, the United Kingdom (UK) Supreme Court delivered its judgment in the UK Financial Conduct Authority’s Business Interruption insurance test case.
Details of the UK Supreme Court judgment can be found by clicking on the link below:
Tower has now received further advice following the UK Supreme Court ruling and how it impacts Tower wordings.
Tower has what is referred to as “at the premises” wordings which may have Infectious Disease cover. Tower’s wordings were not representative of those reviewed by the Supreme Court, but following guidance provided we can apply the outcomes of the judgment to the four wordings below.
Business Interruption cover has to be requested by the customer, as it is not automatically covered. If Business Interruption is selected then Infectious Disease cover is automatically covered under all of the below wordings with the exception of Business Combined, where it is available as an optional extension to the Business Interruption cover:
- Professional Insured
- Business Combined
- Motor Trade
Prior to the ruling Tower have been advising customers and brokers that in order to have a valid claim under the policy they must be able to prove that there was an outbreak of the disease at their premises and the premises closed as a result of the outbreak.
The new guidance following the UK Supreme Court ruling is that customers will still have to provide proof of an outbreak of the disease at the premises, but instead of a specific closure for the premises the Island wide closure order will trigger a claim. There does not have to be a direct causal link between the outbreak and the closure order.
Tower's Retail & Professional Insured policies require a “manifestation” of the disease at the premises.
The UK Supreme Court gave guidance on the circumstances in which these types of policies may respond:
- In principle, the policy may provide cover for a BI loss if a customer can demonstrate that Covid-19 “manifested” at the Premises prior to its closure or the imposition of restrictions.
- The Supreme Court confirmed the meaning of “manifested” to be: "that the person concerned must either have displayed symptoms of the disease or have been diagnosed as having the disease (for example by means of a test)”.
The Business Combined and Motor Trade policies require an “occurrence” of the disease at the premises. The Court’s guidance on how these policies may respond was:
- In principle, the policy may provide cover for your BI loss if a customer can demonstrate that Covid-19 “occurred” at the Premises prior to its closure or the imposition of restrictions.
In order to prove a “manifestation” or “occurrence” customers will have to provide cogent and contemporaneous evidence for our consideration. Evidence could include copies of correspondence from the time, test results or sickness records (redacted for data protection) of any people who can be shown to have been at the Premises at the relevant time.
The relevant time for lockdown 1 would be from the 13th March when COVID was declared a Notifiable Disease on the Isle of Man and the date the premises was ordered to close by the Isle of Man Government. Customers would be indemnified from the point of closure to the date the business reopened and traded normally again.
In addition to proof of a “manifestation” or “occurrence” of the disease at their premises Tower will need to be provided with the following information to consider a claim:
- Policyholder name.
- Policy Number.
- What are they claiming for – what is the client’s loss.
- VAT Status.
- Date of Manifestation & Closure.
- Date of reopening.
- Last 2 years of accounts (i.e. the businesses audited detailed profit and loss sheets for two accounting years).
- Monthly turnover starting January 2018 (or the most recent if you have been trading for less than three calendar years to the month following the business re-opening).
- Employee details (if applicable - monthly, number of employees, all Isle of Man and if applicable UK Government Grant / Furlough details and wage costs).
- Details of any savings / costs not incurred due to the closure of your business (such as commission that would have been charged, heating & light costs, purchases not made (i.e. stock), wages for casual employment, normal cleaning charges etc.
- Any additional costs incurred (to help mitigate the loss).
If you require further information, or wish to discuss in more detail, then please do not hesitate to contact us on 01624 645900.