Insurers will not be bankrupts, if you were worried , don’t be

According to the FCA press release:

The Court found in favour of the arguments advanced for policyholders by the FCA on the majority of the key issues. 

Many policyholders whose businesses were affected by the Covid-19 pandemic suffered significant losses, resulting in large numbers of claims under business interruption (BI) policies.

Most policies are focused on property damage and only have basic cover for BI as a consequence of property damage. But some policies also cover for BI from other causes, in particular infectious or notifiable diseases (‘disease clauses’) and non-damage denial of access and public authority closures or restrictions (‘denial of access clauses’). In some cases, insurers have accepted liability under these policies. In other cases, insurers have disputed liability while policyholders considered that it existed, leading to widespread concern about the lack of clarity and certainty. 

The judgment says that most, but not all, of the disease clauses in the sample provide cover.  It also says that certain denial of access clauses in the sample provide cover, but this depends on the detailed wording of the clause and how the business was affected by the Government response to the pandemic, including for example whether the business was subject to a mandatory closure order and whether the business was ordered to close completely.

The test case has removed the need for policyholders to resolve a number of the key issues individually with their insurers. It enabled them to benefit from the expert legal team assembled by the FCA, providing a comparatively quick and cost-effective solution to the legal uncertainty in the business interruption insurance market.

Good job done by the FCA team, while good job done by the insurers.

Why insurers made a good job? they will claim to the government that those policies were not designed to bring them into bankruptcy, and they will request and get compensation, where needed. Therefore, if you were worried, don’t be, most probably, we will pay for it, it will still come from your pocket. When the system is smarter than us, it may be…

Insurance which works for you is something that yet to be invented

The FCA case study page 17:

Rob, 44, lives is a large detached house in the countryside, with his wife and his 2 children. Rob is now a wedding photographer, after previously being an aerospace engineer.
Rob only recently changed professions, as three years ago his contract as an aerospace engineer came to a sudden end. Unfortunately, this happened just after he had committed to buying a new house, a house which was a significant step up from his previous home (£150,000 more than the current property at the time). He was out of work and without an income for a year, so his financial situation was impacted,
also affecting his mental health and relationship.
The loss of income did not impact on the house purchase as Rob and his wife had a large savings pot and did not have any outstanding debts. However, it did impact on their lifestyle, as they had to avoid some of the previous luxuries they had been used to.
Rob sees himself as very financially savvy and does tend to shop around for financial products. However, he hasn’t reviewed his mortgage, current account or his car insurance for some time, as he feels he already has the best deals.

In October 2017 Rob’s property was damaged by a storm. The storm caused considerable damage to his large electric gates. Rob contacted his home insurance provider to make a claim.

The initial call hander he spoke to informed him that the repairs to his gates would be covered by his policy. Rob sent a claim for the cost of restoring the gates to the insurer when he was then informed that they would not cover the costs, as the gates were classed as fencing which is  not included under the policy. He later realised that this was mentioned in the small print of the policy documents.

If you want to replace the insurer, instead of paying the premium for the insurance companies, make a monthly provision. In case something goes wrong, you can always trust yourself.