Our story on Monday concerning Business Interruption insurance payouts and disputes prompted a number of readers to get in touch with their individual experiences.

Some, but not all, are insured with Hiscox.

Although EYE has not seen the wording or details of individual policies there are some indications that policy holders may be thinking that they are covered for certain events when in fact they are not.

As we all know, insurance policy documents are lengthy, highly detailed, and often riddled with what we think of as ‘get out’ clauses.

In fact the wording is very specific in most cases though it often requires very careful reading to understand the exact meaning.

Since insurers know that policy wording might well end up being scrutinised by highly trained legal minds in a court of law, we can be fairly sure that equally highly trained legals minds created the wording in the first place…

One key issue that has been highlighted is that some policies treat Business Interruption as an inability to access and use the normal business premises, arising from physical damage or from an exceptional event e.g. a terrorist attack resulting in an area containing the office being made an exclusion zone.

The other circumstance is where a business is unable to trade as a result of an instruction from Government or Local Authority. It is this that may be causing some to think they can claim in the present circumstances.

But of course agency is not actually ‘banned’ from working. It may be infinitely harder to do the work but neither government nor local authority has said agents may not trade.

This fact may well give insurers a legitimate reason to reject a claim.

We were sent some examples of responses rejecting claims for Business Interruption as a result of the Covid-19 pandemic.

“As the COVID-19 crisis has developed, we’ve understandably had a huge increase in enquiries regarding the Business Interruption cover in our Commercial Combined policy.

“We can confirm that whilst our wording includes an Infectious Diseases extension, this responds to a defined list of specific diseases only and does not extend to any new notifiable diseases in the UK. COVID-19 is therefore excluded from the policy cover.

“The syndicate have confirmed their stance across all coverholders is that any version of this extension does not provide cover for COVID-19, and for the avoidance of doubt will be introducing a ‘Coronavirus Exclusion’ on all quotations going forward, applicable to both new and renewal business.”

The policyholder told EYE:

“Needless to say I have told my broker that we shall claim as this retrospective attempt to deny cover for all infectious diseases is a classic. ”

Another claimant told us:

“Our  claim was refused despite having the following wording in our policy: Notifiable diseases, vermin, defective sanitary arrangements, murder and suicide £100,000.

“We are going to challenge our insurance company.”

We heard from the owner of a two branch operation:

“I have two estate agency branches and both have Hiscox policies.

“Both policies have business interruption cover with the following clause:

Business Interruption Clause: Public authority

11. your inability to use the insured premises due to restrictions imposed by a public authority during the period of insurance following:

b. an occurrence of any human infectious or human contagious disease, an outbreak of which must be notified to the local authority.

Hiscox has refuted liability.

‘We have considered what is said in your email carefully. Hiscox does not accept that it is liable to you under the Policy’.

“I am considering taking legal action.”

We also heard from the owner of a relatively small agency who is clearly facing hardships and difficulties that will be a sadly familiar to many others in this situation.

“I made a business interruption claim for loss of income due to lost sales, which were all due to go through that week but now are on hold or indeed lost because of the dramatic change in peoples circumstances up and down the chain.

“Also loss of income from rental move-in income that again were all due in the last month and are on hold.

“That in itself had a dramatic affect on our income as a business within days.

“We have received a business grant, but frankly it will be swallowed up in keeping things going during the lockdown.

“We still have to pay staff in March, and portals, and insurances, to remain legally trading.

“Our VAT bill due, all of this was factored against income due in, but that is now lost or perhaps might not materialise until late summer if we are lucky.

“My staff happens to be made up with self employed who invoice me and none work more than two days a week so that we always have staff in during holidays and sick etc.

“That said they are now receiving just a fraction of income due to working from home and just trying to keep things ticking over but on the sales front that is very little other than re assuring vendors and keeping in touch with the sales that have now stopped.

“I am unable to furlough myself as I am trying to keep the rentals income on track which relates to our managed properties but again, that is a juggling act of ensuring tenants continue to pay and keeping landlords updated.

“Some emergency repairs still required.

“The income from this is a help but nothing like the normal income made up of sales and new tenancy set up costs.

“As an industry we have had the ban on “tenant application fees income” which took a massive hit.

“Rising costs with Rightmove!

“Brexit, which did impact on people’s feelings for the future which I had thought we were finally out of in December/January when generally things seemed on the up!

“This Covid 19 is a game changer in so many ways not least the terrible loss of life so many are suffering, so I feel bad even talking about loss of income in the circumstances but still need to live and pay my way in life, so hence I tried to claim the insurance thinking well it might cover it!”

Their claim for Business Interruption was rejected by the insurers.

EYE asked Hiscox for a statement about how it is handling claims for Business Interruption and we were told:

“We understand these are incredibly difficult times for businesses and we are paying claims that are covered by the policies we issue fairly and quickly.

“We review every case individually, and if any customer has concerns about the application of their policy, we encourage them to get in touch with us directly.

“Where the application of a policy is disputed, our focus is on helping to provide customers with greater certainty.

“A fair and fast resolution is in everybody’s interests, which is why we will work with the UK insurance industry, our regulators and customers to seek an expedited resolution through the range of existing independent mechanisms.”

Legal action threatened over non-payment of insurance claims