21st September 2020 – Judgement: Policyholders win on points
The dust is settling after the high court handed down its judgement on the 15th September and the decision, as has been well reported, is on balance in favour of policyholders for claims under the disease clauses, but not so for claims under the denial of access clauses.
We must wait until the 2nd October 2020 to see which insurers will accept the judgement and attempt to repair their battered reputations by paying genuine claimants, and those that will fight on.
After the FCA instructed insurers to communicate with their policyholders we are already finding insurers are putting a particular spin on the judgement without admitting what their future intention is. We foresee that there will undoubtedly be battles of interpretation ahead.
The time is rapidly approaching where the legal battles will give way to the need to assess the loss itself and hopefully the payment of fair compensation for business interruption. The challenges are far from over as the judgement was silent on the treatment of government Covid-19 funding. The wording in each case will be key as will the extent to which the policy meets all or only part of the losses incurred.
Pragmaticum has been in discussion with the FCA to encourage a greater clarity and communication with the public to make known the requirement that firms providing business interruption loss assessing services must be authorised (as we are). The danger of SMEs being victims of poor professional practice from those without the necessary experience and expertise is a real danger.
It is likely that not only will there be a need to properly interpret the policy in assessing the loss, but also in matching those wordings that are not specifically dealt with in the judgement, to those that that are.
What is becoming increasingly clear is that, even if there are appeals, it will not be long before the small number of specialists to assess and adjust these losses will be in great demand.
Where disputes remain, there will be an increasing reliance on the Financial Ombudsman Service (FOS) for a no cost option to resolving complaints.
Pragmaticum will be using its established relationship with senior members of FOS to understand how its new small business unit is gearing up for this challenge. Something we will report on in due course.