As many insurance underwriters are declining business interruption claims notified as a result of the corona virus. this could cause a strain on broker client relationship as well as tarnish the reputation of the insurance industry as a whole.
The average client would think have thought that they were covered under the business interruption section of their policy. Most business would purchase insurance cover having in mind that they would be protected in the event of any losses or claims.
A lot of clients would believe that they are covered under the business interruption section of the policy and now believe that insurers are just looking for loopholes to get out of settling claims.
Even a lot of brokers would have difficulty in interpreting the policy wording when this pandemic started. I even spoke to a few underwriters who could not state categorically whether a policy would cover covid-19, in fact all the underwriters I spoke to at the beginning of the pandemic advised a wait and see approach. This did not instil any sort of confidence when speaking to clients. It would have been more professional to have been able to explain to client if they were not covered and why in plain language.
The Financial Conduct Authority seeking judicial review of policy wordings would help, but the decision should be interpreted in plain language so that the average person would be able to understand the decision and why whichever way the interpretation falls.
Where it is found that clients are covered claims should be settled as quickly as possible, but in the event that clients are not covered I think the government should step in and find some sort of palliatives for business for the sake of the general economy.
Going forward a pool such as that of Flood re should be formed as I can see a lot of insurers would specially exempt this type of risk from their policies going forward, in fact this has already started to happen already with renewals.
Michael Olaniyi Kayode
Moyak Insurance Services
3 Bruces Wharf Road
Grays
Essex
RM17 6PE
01375392087
Michael Kayode is a Director of Moyak Insurance Services