Other Decision Reference 2023-0264

• Case Outcome: Rejected
• Year: 2023
• Date: 29 November 2023
• Reference: 2023-0264
• Subject Matter: Other
• Finantial Sector: Insurance
• Conducts Complained Of: Rejection of claim,Poor wording/ambiguity of policy

Decision Ref:

2023-0264

Sector:

Insurance

Product / Service:

Other

Conduct(s) complained of:

Rejection of claim

Poor wording/ambiguity of policy

Outcome:

Rejected

LEGALLY BINDING DECISION OF THE FINANCIAL SERVICES AND PENSIONS OMBUDSMAN

The Complainant is a limited company trading as an ‘Office Systems Sales Shop Proprietor’,

hereinafter ‘the Complainant Company’. It held an Insurance Policy with the Provider and

this complaint concerns the Provider’s decision to decline the Complainant Company’s

business interruption claim. The policy period in which this complaint falls, is from 11

November 2019 to 10 November 2020.

The Complainant Company’s Case

The Complainant Company says that by way of its Representative, it notified the Provider

by email on 30 March 2020 of a claim for business interruption losses sustained due to

measures imposed by the Government to help curb the spread of coronavirus (COVID-19),

advising that the Complainant Company had “ceased operations on 16th Mar & now with

no permitted access to [its] premises”.

The Complainant Company, in making its claim, relied upon the following provision, ‘the

notifiable human disease clause’, in the ‘Property – Business interruption (Technology)’

section of the Policy Wording:

“We will insure you for your financial losses and any other items specified in the

schedule, resulting solely and directly from an interruption to your business caused

by: …

- 2 -

/Cont’d…

Public authority 8. your inability to use the business premises

due to restrictions imposed by a public

authority during the period of insurance

following: …

b. an occurrence of a notifiable human

disease”.

The Complainant Company notes that the Provider wrote to its Representative on 2 April

2020 to advise that it was declining the claim because the notifiable human disease clause

only covers business interruption losses arising solely and directly from an inability to use

the insured premises and that in no case would it cover losses that would have arisen,

even if the premises could not have been used or accessed, such as those suffered as a

result of the wider economic slow-down following the actions the Government has taken

requiring people to stay at home.

The Complainant Company says that its Representative emailed the Provider on 7 April

2020 to express its dissatisfaction with the Provider’s decision to decline indemnity and

that the Representative submitted, among other things, that the Complainant Company

was unable to use its office as a result of an occurrence of a notifiable human disease and

that the policy had not been written to confine cover to circumstances where there is an

occurrence of a notifiable human disease at the policyholder’s premises.

The Complainant Company notes that the Provider wrote to its Representative on 2 July

2020 to advise that it was standing over its decision to decline indemnity because there

had not been an occurrence of COVID-19 which resulted in the public authority imposing

restrictions on the use of the Complainant Company’s premises and independently of this,

the financial losses suffered by the Complainant Company do not result solely and directly

from an interruption to its business caused by an insured peril, such that the concurrent

restrictions, safety measures and economic slowdown resulted in there being more than

one cause of the losses suffered.

The Complainant Company says its Representative emailed the Provider on 3 July 2020 to

raise a formal complaint regarding the claim declinature, as follows:

“The basis for your formal declinature of the claim cannot be justified with

reference to the policy or to the settled law regarding the construction of insurance

contracts and their interpretation”.

The Complainant Company notes that the Provider issued its Final Response to its

Representative on 20 August 2020, wherein it advised that its position remained as stated

in its correspondence of 2 July 2020.

The Complainant Company says that following a subsequent review the Provider carried

out after the UK Supreme Court decision in The Financial Conduct Authority v. Arch