Statement from Howden: Member update following the Business Interruption FCA test case

Statement from Howden

As you will see from the below statement, Royal and Sun Alliance, having considered the judgement of the Supreme Court, has confirmed that under the Institute of Swimming Members’ Insurance Policy it will not cover your loss of earnings if there was not an occurrence of Covid-19 itself at your Premises prior to its closure or the imposition of Government restrictions. In principle, Royal and Sun Alliance has said that it will only be able to consider any claims under the Institute of Swimming Member’s Insurance Policy for your Business Interruption loss, up to the limit of indemnity, if in the first instance you can demonstrate that there was an occurrence of Covid-19 at your Premises prior to its closure or the imposition of Government restrictions.

If you feel that there was an occurrence of Covid-19 at your Premises prior to its closure or the imposition of restrictions, Royal and Sun Alliance has asked for evidence to show this is the case and have given examples of what this might consist of “e.g. copies of correspondence from the time, test results or sickness records [redacted for data protection] of any people who can be shown to have been at your Premises at the relevant time”. If you have this, please send into the Howden claims team if you have not already done so with a covering email explaining what you wish to claim for and the Howden claims team will forward this to Royal and Sun Alliance for its consideration.

For those Members who have already submitted a claim, we will be contacting you to advise whether or not the policy will respond once we hear back from Insurers about your specific circumstances. Please allow 7 days, within which we will contact you individually.

Statement from Royal and Sun Alliance

We appreciate that Institute of Swimming members will be interested in how their insurance policy might respond to losses they have incurred and this note provides further detail on this.

As you will know, on Friday 15th January, the Supreme Court issued its judgment in the FCA Business Interruption (BI) test case in respect of certain policy wordings. RSA welcomes the clarity that this brings for policyholders and insurers, and is now working to assess claims in light of the ruling so they can move as quickly as possible to payment where this applies.

The relevant clause in the Institute of Swimming policy is found in the schedule as follows:

Infectious Diseases – Extension

This clause applies to the Business Interruption Insurance section of the Policy.

The word Damage is extended to include closure of the Premises or part thereof on the order or advice of any local or government authority as a result of an outbreak or occurrence at the premises of:

    1. Any human contagious of infectious disease other than Acquired Deficiency Syndrome (AIDS) or any AIDS related condition an outbreak of which is required by law or stipulated by the government authority to be notified.
    2. Food or drink poisoning
    3. Vermin or pests
    4. Defective sanitation

Provided that

  1. The Maximum Indemnity Period is limited to 26 weeks
  2. The Indemnity Period shall commence fourteen days from the date which the closure order is enforced at the Premises and not as otherwise stated
  3. The Company shall not be liable under this Extension for more than the limited statement below in respect of any one loss

Limit: £2600

Subject otherwise to the terms Exclusions and Conditions of this Policy

The Supreme Court was not asked to consider this type of policy wording and did not do so.

RSA has considered the circumstances under which the policy would respond. In order to assess whether your policy might in principle respond to the BI loss, it is firstly necessary for you to show that Covid-19 occurred at your Premises in the applicable period prior to its closure or the imposition of restrictions.

If there is no such evidence and your Premises were simply closed as part of the UK-wide lockdown then unfortunately your policy will not provide any cover, either for the impact of Covid-19 that may have occurred at any other premises, or the wider impact of government action, such as restrictions and social distancing.

If you have contemporaneous evidence of any people who can be shown to have been at your Premises at the relevant time and showed symptoms of or had Covid-19, and the premises subsequently closed, then please contact us. Examples of contemporaneous evidence would be copies of correspondence from the time, test results or sickness records [redacted for data protection].