Retail Decision Reference 2022-0368

Case OutcomeUpheld
Subject MatterRetail
Reference2022-0368
Date16 November 2022
Finantial SectorInsurance
Conducts Complained OfClaim handling delays or issues,Failure to process instructions, Poor wording/ambiguity of policy, Rejection of claim
Decision Ref:
2022-0368
Sector:
Insurance
Product / Service:
Retail
Conduct(s) complained of:
Claim handling delays or issues
Failure to process instructions
Poor wording/ambiguity of policy
Rejection of claim
Outcome:
Upheld
LEGALLY BINDING DECISION OF THE FINANCIAL SERVICES AND PENSIONS OMBUDSMAN
The Complainant, a limited company trading as an international language school,
hereinafter ‘the Complainant Company’, held a School Protection Insurance Policy with the
Provider.
The policy period in which this complaint falls, is from 1 July 2020 to 30 June 2021.
The Complainant Company’s Case
The Complainant Company submitted a claim to the Provider in May 2021 for losses
incurred due to the closure of its business from 31 December 2020 to April 2021, because
of measures imposed by the Government to curb the spread of the COVID-19 outbreak.
In making this claim, the Complainant Company notes that Section 2, ‘Consequential Loss’,
of the applicable School Protection Policy Document provides at pg. 16, as follows:
SECTION INSURING CLAUSE (what is insured)
If the School Property (or any part thereof) becomes unusable the Company will pay
any reasonable pecuniary loss or expense incurred by the Insured during the
Indemnity Period resulting from such loss of use …
1. Additional Pecuniary Loss or Expense
- 2 -
/Cont’d…
The Company will also pay any reasonable pecuniary loss or expense as defined in
the Section Insuring Clause resulting from …
(c) School Property being rendered unusable due to an outbreak of a Notifiable
Disease (as defined below) within a radius of 25 miles of the Building(s)
Notifiable Disease shall mean illness sustained by any person resulting from …
(ii) any human infectious or human contagious disease (excluding Acquired Immune
Deficiency Syndrome {AIDS} or any AIDS related condition) an outbreak of which the
competent local authority has stipulated shall be notified to them …”
The Complainant Company says that the Provider declined the claim, on the basis that it had
admitted a previous claim made by the Complainant Company in April 2020, for losses
incurred due to the closure of its business from March 2020 for a period (‘the March 2020
claim’) as a result of measures imposed by the Government to curb the spread of COVID-19.
As the closure from 31 December 2020 (‘the December 2020 claim’) was from the same
occurrence of damage/originating event as the previous closure, the Provider says a 36-
month indemnity period applies, in that there can be no other claim arising from the same
loss during this indemnity period, once the sum insured/limit of indemnity has been
exhausted.
In this regard, Section 2, ‘Consequential Loss’, of the School Protection Policy Document
also provides at pg. 16, as follows:
Indemnity Period means
The period beginning with the occurrence of Damage and ending not later than 36
(thirty-six) months thereafter during which time the School Property (or any part
thereof) shall be rendered unusable in whole or in part”.
The Complainant Company made a complaint to the Provider in May 2021 regarding its
decision to decline the December 2020 claim, noting that the December 2020 claim had
been made under a new contract of insurance covering the period from 1 July 2020 to 30
June 2021, whereas the March 2020 claim had been made under a previous contract of
insurance, covering the period from 1 July 2019 to 30 June 2020.
In that regard, in its email to the Provider on 18 June 2021, the Complainant Company
submitted that the December 2020 claim was made in respect of “a new event” that “has
occurred during the new contract period” and that the Provider is “relying on a section of
the policy that refers to a previous contract”.
Following its investigation of the complaint, the Provider issued the Complainant Company
with its Final Response on 12 July 2021, in which it set out its reasons for standing over its
decision to decline the December 2020 claim.

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