Retail Decision Reference 2022-0221

• Case Outcome: Rejected
• Reference: 2022-0221
• Date: 29 June 2022
• Year: 2022
• Subject Matter: Retail
• Finantial Sector: Insurance
• Conducts Complained Of: Rejection of claim,Failure to process instructions, Failure to provide product/service information

Decision Ref:

2022-0221

Sector:

Insurance

Product / Service:

Retail

Conduct(s) complained of:

Rejection of claim

Failure to provide product/service information

Failure to process instructions

Outcome:

Rejected

LEGALLY BINDING DECISION OF THE FINANCIAL SERVICES AND PENSIONS OMBUDSMAN

The Complainant, a sole trader trading as a coffee shop and sandwich bar, held a ‘Small

Business Insurance – Shop Policy’ with the Provider. The complaint concerns a claim for

business interruption losses arising from coronavirus (COVID-19).

The Complainant’s Case

In April 2020, the Complainant made a claim under the ‘ Murder Suicide or Disease’

extension of ‘Section 4(a) – Business Interruption’ of her ‘Small Business Insurance – Shop

Policy’ for business interruption losses arising from COVID-19. This claim was later admitted

and settled by the Provider.

By email dated 22 October 2020, the Complainant’s Broker notified the Provider of a further

claim for business interruption losses, as follows:

“We wish to put you on notice of a BI Claim. Due to COVID-19 restrictions Insured only

able to offer a Take Away Option to customers since the 1/10/2020 and this is going

to continue for a further 6 weeks assuming that the Take Away Option will sustain

some income.

Income is looking to be down by 80 to 90% for the period referred to above and we

wish to register a BI claim.”

- 2 -

/Cont’d…

Following its assessment, the Provider wrote to the Complainant on 17 November 2020, to

advise that it was declining the claim, as follows:

“We have reviewed your policy and note there has been a previous business

interruption claim relating to the COVID-19 Pandemic. That claim covered losses for a

three-month period from 16/03/2020. [The Provider] paid that claim under the

Murder Suicide and Disease extension of your policy. Under that clause the maximum

cover is for three months business interruption during the indemnity period of the

policy. We have copied in the relevant section of your policy below, and we would

draw your particular attention to the final paragraph which we have highlighted.

In these circumstances the settlement of the earlier claim exhausted the full benefit

to which you are entitled under the Murder Suicide and Disease extension of your

policy. Accordingly, [the Provider] will not be in a position to deal with this claim. […]

Section 4(a) - Business Interruption

F Extensions of Cover

1 Murder Suicide or Disease

[…]

The insurance by this Extension shall only apply for the period beginning with the

occurrence of the loss and ending not later than three months thereafter during

which the results of the Business shall be affected in consequence of the Damage”

By letter dated 26 November 2020, the Complainant’s Loss Assessor wrote to the Provider

disputing its entitlement to decline the Complainant’s claim, as follows:

“I must advise that I would dispute your grounds for declining admission of this claim.

The claim is a distinct and clearly separate claim from the previous one. You appear

to be trying to extend the indemnity period from the previous claim, albeit this is

patently not the case. There is nothing in the Policy wording that limits cover to only

“one” claim per period of cover, under Section 4(a). F Extensions of Cover.

[…] Please note that, where there is any ambiguity in policy wording, the Insured is

entitled to the benefit of any doubt. However, in this instance, I cannot even see that

there is any ambiguity!”