By Gary Hodgson at Hodgson Insurance Services
It’s been a long 12 plus months of lockdown for many hospitability businesses. One of the areas businesses have looked to help assist with losses incurred is through their business insurance policies.
Although most policies include Business Interruption cover for losses occurred from physical damage to their property, very few included cover for disease or pandemic related losses.
Some policies had vague wording in respect of disease related occurrences and these were rightly taken to the courts by the Financial Conduct Authority (FCA) to get complete clarification for customers and also insurers.
On 15th Jan this year the Supreme court handed down their judgement of the various test case wordings.
Clarity was given, and some policies have now had to settle their customers losses, we are probably seeing about 15% of insurance policies that have to settle claims, unfortunately for the other 85% there simply isn’t any cover, even though media reports came across that all businesses could claim, this was false. However, insurers at the end of March 21 have paid or have agreed to pay nearly £500 million worth of losses.
If you originally made a claim for Business Interruption losses and you have not heard from your insurer, loss adjuster or broker since 15th January then we’d recommend you contacting them as soon as possible to get an update on whether your policy should settle your claim.
Even if your claim was originally declined in 2020, please go back and check, as some insurers that are now paying did originally decline claims.
If you didn’t make a claim originally but now realise you have sustained quite large losses, it’s not too late to claim. Speak to your insurance broker or the provider from March 2020 and they should be able to confirm quite quickly if you are eligible to claim for losses.
Getting Ready To Open Back Up.
There’s light at the end of the tunnel and we seem to have a fairly clear path when the hospitality industry can start to open.
Many guest providers are having to review the way they trade though, some are introducing kitchenettes to bedrooms, some are stopping providing breakfasts, or offering guests access to a shared kitchen. Some guest houses are opening up to the public by bringing in outside seating to cater for the latest Covid rules. You may have to bring in extra staff, so cover for employees is required. These are all major risk factors to an insurance company so if the way you trade is going to be changing to the way you run it before lockdown, speak to your insurer or broker, let them know your plans and they should be able to adjust the insurance policy for your new way of trading and avoid future issues should you need to make a claim.