It’s almost three years since the start of the coronavirus outbreak and yet businesses that suffered are still battling their insurance companies for settlements.
I told last week how some insurers are refusing to pay out on policies that included business interruption cover – and you can’t get much more interrupted than being ordered by the Government to shut up shop during a global pandemic. That article is here.
Charities have been hit too, among them the Small Woods Association, founded to support people working in woodlands.
“We closed as soon as Boris Johnson made his ‘stay at home’ announcement in March 2020, we locked the offices and went home,” said its business manager Deb Cheetham.
“Some of our work could be transferred online but a lot could not, predominantly our hands-on training courses.
“We run qualifications in chainsaw use, carving, hazel hurdle fencing, woodland management – these are practical, creative courses you cannot do online.”
Lockdown caused the income of the charity, based at Coalbrookdale, Shrops, to slump from a healthy profit the year before into a loss of almost £15,000.
It had an insurance policy taken out through Matrix Underwriting Management that included business interruption cover provided by Argo Global.
“When we made a claim we were turned down flat,” Deb said.
“They said that the data did not show any Covid cases within a certain radius of the site.
“That was really difficult for us to disprove because Covid testing and data did not exist for the initial period of lockdown.
“Whether or not there were cases we still could not carry on with face-to-face courses, we were told to stay at home like the rest of the country, but the insurers seem to be saying we should have carried on regardless.
"I think they've been very unfair. The premiums are not cheap, especially for a charity, and we hoped in circumstances like this that were out of our control they would come good, it’s really quite sad that they haven’t.”
The Association went to claims management firm MFN Claims Limited for help.
It points out that although testing to confirm Covid cases was scarce at the start of the pandemic, an official calculating tool does exist to estimate case numbers by location.
“Although the insurer is saying there is no evidence of Covid nearby in March 2020 this is just not true,” said MFN Claims chief executive Ian Sellman.
“The Financial Conduct Authority’s website shows that Imperial College, London, estimated that there had been 44 cases within a one-mile radius of the Small Woods site by March 23, 2020.
“Both the courts and the FCA have told the insurers to accept these estimated figures but they refuse to do so.
“It’s a sad state of affairs when insurers are able to ignore both the law and the regulators with impunity.”
Neither Matrix Underwriting nor Argo Global wanted to comment.
A spokesman for the Financial Conduct Authority said: “Despite our recent review showing good practice by many insurance firms, we found that some have failed to meet, or meet consistently, our requirements in handling business interruption insurance claims promptly and fairly.
“We will consider action where appropriate.”
The FCA's guidance on business interruption insurance is here.
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