Service Decision Reference 2023-0258
| Case Outcome | Rejected |
| Year | 2023 |
| Date | 22 November 2023 |
| Reference | 2023-0258 |
| Subject Matter | Service |
| Finantial Sector | Insurance |
| Conducts Complained Of | Rejection of claim |
Decision Ref:
2023-0258
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 is a limited company providing consultant surgery services, 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 13 July
2019 to 12 July 2020.
The Complainant Company’s Case
The Complainant Company says that through its Representative, it first notified the
Provider on 31 March 2020 of its claim for business interruption losses sustained as a
result of the temporary closure of its business from 13 March 2020 for a period, due to
measures imposed by the Government to help curb the spread of the coronavirus (COVID-
19).
The Complainant Company says that in making such a claim, it relied upon the following
provision, ‘the notifiable human disease clause’, in the ‘Property – Business Interruption
(Office)’ section of the Insurance Policy Wording:
“We will insure you for your financial losses and any other item specified in the
schedule, resulting solely and directly from an interruption to your business caused
by: …
- 2 -
/Cont’d…
Public authority 5. your inability to use the office 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 6 April
2020 to advise that the notifiable human disease clause only covers business interruption
losses resulting solely and directly from an interruption to the business caused by an
inability to use the office, due to restrictions imposed by the Government or a public
authority following an occurrence of COVID-19 at the insured premises.
The Complainant Company says that its Representative emailed the Provider later that
same day, on 6 April 2020, as follows:
“We believe that your interpretation of the policy is incorrect. We regret that we
cannot accept your interpretation of the policy in this case …
It is clear that [Complainant Company] is unable to use the office as a result of
restrictions imposed by a public authority. These restrictions have been imposed as
a result of an occurrence of a notifiable human disease. There is no policy
stipulation that the cover ‘only applies to a mandatory closure order issued by a
Public Authority which specifically applies to [the Complainant Company’s]
premises’.
The policy has not been written to confine the cover to ‘an occurrence of a
notifiable human disease at [Complainant Company’s] premises’”.
The Complainant Company notes that the Provider sent its Final Response on 1 December
2020, advising that following its claim review, its position remained as stated in its
previous correspondence of 6 April 2020 and it also advised, for the first time, that the
Complainant Company’s business appeared to fall within an essential service category
permitted to remain open by Statutory Instrument No 121/2020 – Health Act 1947
The Complainant Company set out its complaint in its email to this Office of 1 January
2021, wherein it submitted that the Provider’s interpretation of the policy wording was
“bizarre and illogical”. It said that the Provider was wrong to assume that the Complainant
Company was an essential service permitted to remain open by the provisions of S.I. No
121/2020, as follows:
“[Provider] made no specific inquiries with [Complainant Company] in regard to this
assumption. Many healthcare facilities would be essential, however [Complainant
Company’s] practice is predominantly a screening service for people who are not
unwell. This is not an essential service and was closed as were the national
screening programs during Covid-19”.
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