The FCA is launching a short consultation on guidance to help policyholders, insurance intermediaries and insurers judge how the presence of Covid-19 in a particular area can be proved. The guidance will be launched as quickly as possible once the Supreme Court has made its binding judgement in the regulator’s business interruption insurance test case.
The regulator’s draft guidance intends to simplify the process of proving the presence of Covid-19. This will allow eligible policyholders to receive their claim payments at the earliest opportunity, provided the Supreme Court upholds the High Court’s ruling that the relevant business interruption insurance policies should provide cover in response to the Covid-19 pandemic.
Some business interruption policies require the insured to prove the presence of the virus in a particular area around the insured premises. The High Court, in its guidance for interpreting the policy wordings, outlined the types of evidence and methodologies that can be used by policyholders to prove their claim.
Whilst some elements of the High Court judgement are currently being appealed at the Supreme Court, the declarations made by the High Court relating to the presence of coronavirus are not being contested and, as such, the draft guidance is unlikely to be affected by the Supreme Court’s judgement, which is expected early in the New Year.
Under the draft guidance, it is proposed that intermediaries assisting policyholders with claims should act in accordance with the proposed guidance for policyholders, as outlined in the draft document. Those helping insurers assess claims should have regard for the draft guidance for insurers.
Moreover, brokers are encouraged to ‘adopt approaches that streamline and expedite claims handling for their clients’.
The FCA has requested that comments on the guidance consultation are made by 18 January 2021.
