Business Interruption Insurance – FAQ
On 4th February 2021 we hosted a webinar for dental practices to discuss the Supreme Court’s recent decision in respect of Business Interruption Insurance (BII) claims.
During the webinar, many of you were asking the same questions about your BII claim. Here we have set out those frequently asked questions and our responses.
1. Is there a definitive list of insurers who are now paying out after the Supreme Court ruling?
Unfortunately, not at this stage. The only insurers legally bound by the decision are the eight who took part and in only in respect of those policies that were reviewed by the court. However, all insurers must follow the judgment, and if a claim were issued against them, the lower court would have to follow the ruling.
You also need to bear in mind that each insurer offers a range of different policies, some policies with BII and some without. Policies may also change slightly, as contracts are updated by the insurer.
It is therefore better to check your policy in light of the judgement to determine if you have a claim and make representations to your insurer accordingly.
2. My broker has refused to make a claim, what can I do about this?
First, write to your broker in light of the Supreme Court’s decision, asking
them to now make a claim on your behalf and on what grounds. If the broker refuses, remind them that you are their client and that they need to act in your best interests. Please note that this only applies to insurance brokers (who act for the policyholder) not insurance agents (who act for the insurer).
If the broker still refuses you should contact the insurer directly. The contract is between you and the insurer; the broker is simply an intermediary. Any claim issued in the court would be issued against the insurer. You can also consider asking for the broker’s complaints procedure and whether to make a complaint to their regulator.
3. Do we have to use the insurer appointed loss assessor?
The insurer will appoint a loss adjustor to assess the value of the claim. You will have no say in who this is. If you do not agree with the loss adjustors valuation, you can appoint a loss assessor to assess the value of the claims and present this to the insurance company. No doubt you and the insurer will then go back and forth on the points of dispute until a figure is agreed. If you cannot agree a figure then you would have to take the case to the financial ombudsman service or court. You would need to weigh up the difference in offers and the potential cost of pursuing the matter further.
4. Who covers the cost of the assessment, accountants’ fees etc.?
This will depend on the wording of your policy. Some policies cover accountants’ costs for preparing books to show loss of profit for example.
5. Can we sue the broker for selling a policy that did not provide cover during the pandemic?
As set out above, there is a difference between an insurance broker and an insurance agent. If it was a broker acting for you then they owe you a duty of care; normally in both contract and in tort. As you owe a duty of care to provide correct dental advice, a broker owes you a duty of care to provide you with advice on insurance, to the standard of a reasonable competent insurance broker.
If the broker holds themselves out to have specific dental insurance knowledge, then the test will be that of a reasonable competent dental insurance broker.
Whether the broker has breached the duty of care will depend on what information they were provided by the client as to what the needs to the business were.
You also have to bear in mind, there is a difference between being mis-sold a policy, to it later being discovered the policy provided inappropriate cover following a global pandemic.
Whether you were mis-sold a policy will depend on what representations were made to you by the broker when recommending the insurance policy.
The question of whether the insurance provide appropriate cover, will depend on what was in the minds of the parties at the time the policy was entered into. Unless you specifically requested cover for business interruption insurance as a result of a pandemic, it is difficult to see how it could have been in the minds of a reasonable competent dental insurance broker to advice this was needed. You also must bear in mind that some policies have disease cover; some have prevention from access cover; some policies have both; some limit the geographical area; some limit what diseases are covered; some policies have no BII cover at all.
Whilst it is extremely unfortunate that certain policies will not provide cover, and we sympathise with those practices that have such policies, the question will be what was in the minds of the parties at time the contract was made. Arguably, no one could have predict the shear financial devastation COVID-19 would have on the world.
6. If I can’t recover under my BII policy, what other options do I have?
Any practice that has a purely private patient list (i.e private patients that do not flow from an NHS contract), and who is not able to claim for damages under their BII policy may well have a claim against the CQC for the unlawful closure of dental practices on the 25th March 2020. For more information on the CQC legal challenge please email firstname.lastname@example.org
If you need any further advice or assistance about your BII claim or concerns about your broker, do not hesitate to contact us on 0207 388 1658 or at email@example.com.