Practice Insurance & Covid-19 UPDATE

The Financial Conduct Authority (FCA) brought court proceedings in July 2020 to test how certain business interruption insurance policies respond to claims arising from Covid-19. The Court delivered its judgment on 15th September 2020.

All relevant insurers have been reviewing the lengthy and complex judgment, in order to determine if it changes their assessment of claims.

The insurers with whom our clients have Practice Insurance, have previously confirmed that there is no cover for Covid-19 related business interruption claims under their policies in most circumstances.

  • Many insurer policy wordings (including Zurich’s Practice Insurance, arranged through us) were not in scope for the court proceedings, as they had already been deemed to be clear, regarding Covid-19 not being covered. Most relevant policyholders have already received final responses to claims, which do not change.
  • We are in regular contact with other relevant insurers to obtain absolute clarity, following the judgment. There is no need for you to take any action to seek such clarity; we will contact clients if there are any changes to the advice that has been given.

In terms of the wider UK insurance market, the FCA judgement has clarified that there are some policy wordings, which may need to respond to claims. However, these insurers and the market more generally, have taken steps to minimise exposure to future losses by clarifying their cover terms around pandemics, in most cases removing it entirely.

As always, please stay safe and well.

With very best wishes,

The Lloyd & Whyte Team