Other Decision Reference 2023-0004

• Case Outcome: Upheld
• Reference: 2023-0004
• Date: 16 January 2023
• Year: 2023
• Subject Matter: Other
• Finantial Sector: Insurance
• Conducts Complained Of: Rejection of claim

Decision Ref:

2023-0004

Sector:

Insurance

Product / Service:

Other

Conduct(s) complained of:

Rejection of claim

Outcome:

Upheld

LEGALLY BINDING DECISION OF THE FINANCIAL SERVICES AND PENSIONS OMBUDSMAN

The Complainant is a limited company trading as a guesthouse, hereinafter ‘the Complainant

Company’. The Complainant Company held a commercial insurance policy with the Provider,

the Insurer. The Provider engaged a named firm to provide its claims administration

services, hereinafter ‘the Agents’.

This complaint concerns the Provider’s declinature of two business interruption denial of

access claims, made by the Complainant Company. The policy period in which this complaint

falls, is from 19 February 2020 to 18 February 2021.

The Complainant Company’s Case

The Complainant Company says that it notified the Agents in April 2020 of a business

interruption denial of access claim, arising from the temporary closure of its guesthouse

from 18 March 2020, following a Government direction ordering the temporary closure of

hospitality businesses due to the outbreak of coronavirus (COVID -19). The Complainant

Company reopened its guesthouse on 1 August 2020. The Provider later admitted this claim

in the amount of €26,250.00 (twenty-six thousand two hundred and fifty Euro).

The Complainant Company subsequently notified the Agents that it was seeking to make

two further business interruption denial of access claims, this time arising from the

temporary closure of its guesthouse from 21 October 2020 for a six-week period, and again

from 23 December 2020, following Government directions at those times that placed

Ireland on Level 5 of the Plan for Living with COVID-19, due to the spread of the COVID-19.

- 2 -

/Cont’d…

The Complainant Company relies upon the following policy provision under the ‘Business

Interruption - Automatic Extensions Applicable to Sections 2A [‘Loss of Gross Profit’], 2B

[‘Loss of Gross Revenue’] and 2C [‘Increase in Cost of Working – Stand-alone Protection’]’

section at pg. 41 of the applicable Policy Wording booklet, as follows:

“2. Denial of access

The Insurance under Section 2 [‘Business Interruption’] is extended to include loss

which results directly from the interruption of or interference with Your Business at

the Premises in consequence of the closing of or denial of access to the whole or part

of the Premises by the order of a competent Public Authority.

Our liability under this Extension shall be limited to 3 (three) months starting with the

date of the order of a competent Public Authority”.

In its letter to the Complainant Company dated 2 June 2021, the Agents advised that:

“We note that [the Complainant Company’s Representative] believes that there is

cover for three Business Interruption claims, i.e. a further two claims over and above

the current claim which we are handling on behalf of Insurers and has advised, via

[the] Loss Adjusters, ‘that the insured will be pursuing the Two further “separate”

claims for the 2nd & 3rd Lockdowns, given the policy renewed on 18/02/2021. The

policy wording only provides a limit of 10% for any one event during the period of

insurance and therefore we note that this limit will apply to these incidents.’

He has previously also discussed this with [the Agents], who confirmed to [the

Complainant Company’s Representative] that they would refer the matter to

Insurers, whilst also confirming the cover position to him.

We can now also formally advise as follows;

Insurers have reviewed their policies with Solicitors in relation to the cover that is

contained therein, and in conjunction with a review of the outcome of recent court

rulings in the UK and Ireland.

Following same, we can confirm that we are fully satisfied that there was one

Pandemic giving rise to a claim, albeit with varying levels of restrictions imposed at

various times in relation to the overall issue. Therefore, the Pandemic is treated as

one loss, and one policy limit applies to it. We note that settlement in your first claim

was for the entire applicable policy limit.

Please also note that this policy was not renewed with [the Provider] in February

2021.

In light of the above we trust that you shall again note that no further claim in relation

to the Pandemic is allowable under the policy to hand and we trust that you shall

appreciate the position in this regard, noting that the allowable policy limit has

already been paid”.