If you are reaching towards your business interruption insurance, it is likely because your company has been experiencing hardships during the pandemic. Covid-19 has changed the world completely. In a single year, the unemployment rate has risen to 5% in the UK. That is because the pandemic has forced many businesses to close their doors. Many companies have resorted to continuing online. However, as they are unable to remain open to the general public, they have experienced great financial damages.
The pandemic may have caused great losses within your business that were not your fault. That’s why you tried to make a business interruption insurance claim. If you were rejected, don’t worry, you are not alone! Many business owners have been rejected for a pay-out due to the fact that their policies do not cover for any sort of business losses caused by a pandemic. That’s why it’s important to have an experienced solicitor on your side to give you support and advice with your claim. Gowing Law’s experienced claim solicitors are here to help.
Call us today on 0800 041 8350 or click the link below to begin with your claim:
What is Business Interruption Insurance?
When you create a business, you go into it knowing that there is a chance that things could go wrong. You get employer liability insurance to protect yourself, employees who suffer from work accidents and any customers who get hurt on your premises. However, there is a chance that you could experience more extreme incidents in the future that could force you to make a loss. This includes criminal activities and natural disasters (such as flooding and fires). If you are the type of business that owns a lot of stock you may have invested in this insurance in order to have financial support if the stock needs to be replaced if it is damaged.
Overall, if you have purchased business interruption insurance, the main aim of it is to put you back in a steady financial position that you would have been in before an unexpected event caused losses. That’s why a lot of companies have now been asking if their policies actually cover Covid-19 and any losses that have come about due to the lockdown and the pandemic.
Why would I be rejected for a Business Interruption Insurance Claim?
Previously, you may have struggled to actually get your insurer’s pay-out due to the fact that they did not believe that your policy covered you for damages within the pandemic. That’s why you may have originally been rejected for a claim. Business interruption insurance contracts cover different things, depending on the type of business that pays for them. However, if you had cover for diseases, you may have struggled to receive a pay-out because Covid-19 was only classified as a notifiable disease on the 5th March 2020. Some companies will only cover very specific diseases, which should be listed in the contracts. Therefore, the wording of your policy becomes important when it comes to getting compensation. A claims solicitor can help scrutinize your contract to see if you could be eligible for a pay-out.
With the supreme court deciding in favour of Covid-19 related pay-outs, it’s important that you take a look at your contract to ensure they fall under the right clauses. Here are the three clauses you will need to be eligible for an insurance pay-out:
As the courts have decided that Covid-19 interruption to businesses could call for an insurance pay-out, these clauses will become an essential part of getting the compensation that you deserve. Before, you may have been rejected because Covid-19 was not classified as a notifiable disease. You may have also been rejected because during the tier system, you closed your business without it being an action enforced by the government (aka. it was a business choice of your own free will.) However, there is a chance now that your claim could be reconsidered if it has already been rejected. That’s why it’s important that you get in touch with a solicitor as quickly as possible about your business interruption insurance claim.
Alternative Reasons for Rejection: Business Interruption Insurance
Building on the previous point, we would just like to reiterate that there could be other reasons why you were rejected for a pay-out outside of Covid-19 and the current pandemic. According to the FCA:
“The test case was not intended to encompass all possible disputes, but to resolve some key contractual uncertainties and ‘causation’ issues to provide clarity for policyholders and insurers.”
This implies that whilst this decision from the Supreme Court to include Covid-19 as a reason for a pay-out does not mean you will automatically receive it. There is still a chance that your own business decisions were the reasons behind your overall financial loss and business interruption. For instance, if your business deals with oil supply, you may find the costs of this product have risen over the course of this year, meaning that there is a chance you may struggle to keep up with payments. However, if you believe that you and your business were ultimately the victims of the pandemic, you have the right to make a legal claim. In some cases, you may even be able to make a co-ordinated legal action against your insurer in relation to non-payments.
What should I do if I have been rejected for a business interruption insurance claim?
It can be incredibly disheartening to be rejected by your insurer in light of the current events. You have tried everything to keep your business afloat during the pandemic. That’s why you may feel as if you have been let down by your insurer and other people who are supposed to be there to help you in your time of need. We understand that it is a very sensitive time for you. That’s why we want to be there to support you throughout your claim.
If you have been rejected for a claim then you do have the right to make an appeal. When you made a business interruption insurance request, it may have been before Covid-19 and the lockdown were classified as genuine reasons for a pay-out. There may also be specific wording in your contract that needs a legal expert to read over in more detail.
Even if you have already been rejected for a claim, Gowing Law Solicitors can help you through this difficult time. Our forensic accountants and corporate solicitors can give you free advice and will be happy to look through your contract. If you have a business interruption clause then you will have a valid claims on your hands. Our lawyers can then start the arrangements to make a claim against your insurer to win you the pay-out that you deserve.
How much could I receive from a pay-out from my business interruption insurance?
When you make a claim to receive business interruption insurance, the amount you receive as a pay-out will depend on your own personal circumstances. You will need to look at the contract you have agreed to and have a solid argument prepared as to why you need an insurance pay-out. Your contract will let you know what could constitute the need for compensation, including criminal activities against you, your employees or general business or natural disasters (such as flooding, fires and infestation). However, you will need to prove that you were not responsible for these “disasters”. Your evidence can include:
- Proof of the amount of income you receive from your business (to prove you have lost income)
- Your trade history
- News, facts and figures about marketing trends
- Business/Loss Assessors and Forecasts
- Statements from employees and business partners
If you decide to work with a solicitor, they can work through your contract. That way they can provide you with estimates about how much you could be owed if you make a claim. Even if you are already receiving government assistance, you could still make a claim with the help of our experienced lawyers. Just keep in mind that there are a number of pitfalls that you could experience in relation to a pay-out. Here are a few examples that you should be aware of throughout your claim:
Your solicitor can help you avoid these pitfalls by going through your contract with a fine tooth comb. That way you can work with them to get a valid pay-out. You can use it to support your business and employees.
How long will it take to make a claim?
Although it will only take one day to assess whether or not you have a valid claim on your hands, it’s important that you understand that every claim is different. That means that some claims are going to take longer to sort out than others. For instance, a claim that has been previously rejected and has very generalized clauses is going to take longer than a claim that has a very direct disease clause. Be patient with your solicitor and give them the time to build their argument. The more time you allow them, the more likely it is that you are going to receive a pay-out from your insurer. Feel free to ask questions about the progression of your case. Your solicitor will always be willing to talk you through what you should expect in the upcoming weeks.
Gowing Law Solicitors can support you with your Business Interruption Insurance Claim!
Here at Gowing Law Solicitors, we understand that this is a very sensitive time for a lot of our clients. The pandemic has thrown a lot of business owners on their heads and they need support. Even if you have already been rejected for a claim, we have experienced forensic accountants and corporate solicitors here to help you. They can give you no obligation advice and consultations to start with. That way they can look through your contract. Then they can ensure that all of the support they provide is tailored to your situation. If you are happy to work with them, they can offer their services on a “no win-no fee” basis. That means you will not need to pay any hidden fees. Instead we will always be upfront with our costs to ensure you feel comfortable making your claim.
If you want to contact us, you can call us on 0800 041 8350, email us at bi@gowinglaw.co.uk or use our claims checker. From there, one of our lawyers will be in contact to discuss your claim. Feel free to direct any questions towards them!
Ready to read more?
Don’t forget that you can read more about business interruption insurance from Gowing Law’s blog page. We are proud of all of our content as we update it weekly with new information about UK legal claims. This includes information about tax claims and personal injury claims. You can also learn about our latest seasonal giveaways, events and updates about our law firm. If there is topic you would like us to cover in our blog, feel free to let us know. You can send in your suggestions to info@gowinglaw.co.uk. One of our law writers will let you know that they are going to write about your ideas. We will also let you know when the blog has been uploaded.
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We wish you the best of luck with your claim and look forward to helping you soon!
