Covid-19 Business Interruption Claims

We act on behalf of hundreds of business across the UK who suffered devastating losses when forced to close during the Covid-19 pandemic due to national lockdowns imposed by the UK Government.

We understand that your business will have faced significant financial struggles made all the worse by insurers refusing to payout compensation in what is often a complex and confusing claims process.

Our experienced lawyers specialise in reviewing insurance policies, assessing claims, challenging insurer refusals, and advocating for fair compensation. We provide personalised guidance tailored to your unique circumstances and work diligently to achieve the best possible outcome for your business.

Understanding business interruption claims

Business interruption claims involve seeking compensation for financial losses resulting from significant disruptions to your business operations. These disruptions can arise from various events, and insurance policies vary in their coverage and requirements.

How we assist with business interruption claims

Our skilled legal team is here to guide you through the claims process, offering the following services:

Policy Review: We analyse your insurance policy, deciphering its specific language and provisions, and provide clear advice on whether your claim is viable.
Challenging Refusals: If your insurer has denied your claim, we can challenge their decision on your behalf, leveraging our knowledge and expertise to advocate for a successful outcome.
Claim Preparation: We assist in preparing your claim, ensuring it includes all necessary documentation and evidence to support your financial losses adequately.
Negotiation and Settlement: Our experienced negotiators engage with your insurer, striving to reach a fair settlement that compensates you for your business interruption losses.
Litigation Support: In cases where a settlement cannot be reached, we are prepared to represent your interests in court, providing skilled litigation support to protect your rights.

Making a business interruption claim: key considerations

When making a business interruption claim, several important factors come into play:

Policy Evaluation: Each insurance policy is unique. We help you navigate the interpretation of policy wording to determine if your claim is covered.
Timely Notification: It is crucial to inform your insurer about the claim promptly, adhering to the specific notification requirements outlined in your policy.
Assessing Losses: We work closely with you to calculate the financial impact of the interruption on your business, considering factors such as lost profits, additional expenses, and maximum claimable sums.
COVID-19 Considerations: The pandemic has introduced additional complexities. We offer expertise in navigating COVID-19-related business interruption claims, including coverage for disease clauses and denial of access clauses.

Business interruption insurance advice

Our experts can provide comprehensive guidance and support related to your business interruption insurance, specifically concerning COVID-19. We offer:

In-depth Discussion: We understand the unique challenges brought about by the pandemic and engage in meaningful discussions about your business and the impact of COVID-19.
Policy Review: Our team conducts a meticulous review of your insurance policy wording to assess the merits of your claim and determine the best course of action.
Tailored Advice: We provide expert advice tailored to your specific circumstances, informing you of the strengths of your insurance claim and suggesting the most favourable way forward.

Key contact

Erich Kurtz

Senior Associate

Erich joined Hugh James in 2021 as a Senior Associate in the Financial Mis-Selling team. He specialises in recovering compensation relating to regulated and unregulated investments, insurance, consumer credit agreements, pensions, mortgages and other financial products.

Erich has specialised in complex multi-claimant litigation, with a strong track record of leading financial group litigation cases.

Most companies recognise the importance of having comprehensive business insurance coverage to safeguard themselves against various risks and uncertainties. Within these insurance policies, there is typically a component that provides compensation in the event of a business interruption, regardless of the cause. While physical damage to premises from incidents like fires or storms commonly triggers such coverage, it’s worth noting that many policies extend coverage beyond instances of physical damage. They also respond to situations where interruptions occur due to other factors or perils. This broader coverage ensures that businesses can receive financial support and assistance even in scenarios where physical damage may not be the sole cause of the interruption.

Business interruption insurance can provide coverage for various aspects, including:

Profits: Compensation based on the business’s previous months’ performance, ensuring financial stability during the interruption.
Fixed Costs: Coverage for operating expenses and other necessary costs incurred while the business is temporarily unable to operate.
Temporary Relocation: Reimbursement for the expenses associated with moving to and operating from alternate premises during the interruption.
Wages: Support for paying employee salaries and wages during the period when the business cannot operate.
HMRC Taxes: Ensuring the business can fulfil its tax obligations on time, helping to avoid penalties or financial difficulties.
Loan Repayments: Coverage for monthly loan repayments, allowing businesses to meet their financial obligations even when income is affected.
Other Expenses: Reimbursement for reasonable and essential expenses that enable the business to continue its operations during the interruption.

These coverages aim to provide financial stability, minimise disruptions, and help businesses navigate challenging times by mitigating the impact of the interruption on their cash flow and overall financial health. The specific coverage and terms will vary depending on the insurance policy and the business’s individual needs and circumstances.

If a company facing financial distress holds a valid business interruption insurance policy, creditors may have the opportunity to make claims related to the impact of the coronavirus pandemic. Following a decision by the High Court, administrators or liquidators of insolvent businesses should thoroughly examine the insurance policies held by the company to determine if a claim can be pursued against the insurer for business interruption. A successful claim would result in improved dividends for the creditors of these businesses. Secured creditors should communicate with the insolvency practitioner to inquire about the existence of such a policy and assess whether it forms part of the security portfolio, potentially influencing their position.

Even if you made the voluntary decision to close your business without being explicitly instructed by the government, you may still be eligible to make a claim for business interruption. Numerous businesses chose to suspend operations due to concerns and apprehension among customers and clients about the pandemic, which can be considered a reasonable response. Additionally, certain business types may have faced challenges in implementing and adhering to social distancing measures and the two-meter rule, leading them to prioritise the safety of their staff and customers by closing down. In such cases, a valid claim for business interruption may arise.

To obtain copies of your insurance policy documents, including the schedule, certificate, and booklet, it is necessary to contact your insurance company directly. As per legal obligations, insurers are required to provide these documents upon request. Reach out to your insurance provider and make a formal inquiry to obtain the necessary policy information. This will enable you to review and understand the terms, coverage, and conditions outlined in your insurance policy. Being familiar with the details of your policy will help you make informed decisions and ensure you have a clear understanding of your insurance coverage.