Service Decision Reference 2022-0075

• Case Outcome: Rejected
• Subject Matter: Service
• Reference: 2022-0075
• Date: 02 March 2022
• Finantial Sector: Insurance
• Conducts Complained Of: Rejection of claim

Decision Ref:

2022-0075

Sector:

Insurance

Product / Service:

Service

Conduct(s) complained of:

Rejection of claim

Outcome:

Rejected

LEGALLY BINDING DECISION OF THE FINANCIAL SERVICES AND PENSIONS OMBUDSMAN

The Complainant, a limited company trading as a restaurant, cocktail bar and takeaway (“the

Complainant Company”) held a business insurance policy with the Provider.

The complaint concerns a claim for business interruption losses arising from the outbreak

of coronavirus (COVID-19).

The Complainant Company’s Case

On or about 11 May 2020, the Complainant Company’s Broker (“the Broker”) notified the

Provider of a claim for business interruption losses as a result of the temporary closure of

the Complainant Company’s business due to the outbreak of COVID-19.

Following its assessment, the Provider wrote to the Broker on 15 May 2020 to advise that it

was declining the claim, as follows:

“We refer to our telephone conversation held on 11 May 2020 regarding claim

number […] raised against your client’s […] policy number […].

- 2 -

/Cont’d…

We have carefully considered your client’s insurance policy to assess whether it

provides cover in circumstances where your client’s business had to close to assist

nationwide measures introduced by the Government to slow the spread of the COVID

19 pandemic. The business interruption section of the policy is normally triggered

following physical damage to the premises or stock caused by one of the insured

events listed in the policy. There is also an extension against business interruption

resulting from a case or cases of specifically named notifiable diseases (listed in the

policy) at the premises or caused by food or drink supplied from the premises or any

organism likely to cause one of the named listed notifiable diseases being discovered

at the premises.

We have determined for the reasons outlined in detail below that your client’s policy

does not provide cover in these circumstances and unfortunately, we must decline

your client’s claim as a result.

The relevant wording of the policy in so far as relates to your client’s claim, is as

follows:

1. Section 2 of the Policy provides cover for business interruption. “Business

Interruption” is defined as:- “Interruption of or interference with the business

carried on by the Insured at the premises in consequence of damage to property

used by the Insured at the premises for the purpose of the business.”1

2. The Policy specifies a number of additional extensions that apply to section 2

business interruption cover, one of which at clause H (“the clause”) provides:-

This extension provides cover against business interruption resulting from the

following.

1. A case or cases of any of the notifiable diseases (as listed below) at the premises,

or caused by food or drink supplied from the premises.

2. Any organism likely to cause a notifiable disease (as listed below) being

discovered at the premises.

3. Murder or suicide at the premises.