These are interesting and challenging times in the world of insurance. With the travel industry brought to a grinding halt, and many other companies experiencing demand slumps, there's a lot of people reaching for their personal and commercial insurance policies to see what protection they have. No doubt insurance claim lines are seeing unprecedented traffic in these strange times.
But as many are now discovering, insurance policies don't provide unlimited protection. Whatever the policy holder imagined, the reality is that contracts of insurance specifically include and exclude plenty of things and sadly it's often only when the unthinkable happens that many people actually get to understand the detail contained within those documents, sat unread or carefully filed away.
While the Association of British Insurers (ABI) seeks to set out the contractual position, and explain the reasons why many business interruption policies might not cover the effects of COVID-19, there are calls in the media and across the political spectrum for insurers to "do the right thing" and deal with claims fairly and quickly. The ABI offers that only a small number of policies will likely cover loss, arguing that even where cover for loss as a result of pandemics exists within the policy, it might often be limited to named pandemics only and, for example, only cover business interruption due to business premises being directly affected by the presence of a disease.
Ultimately, what's "fair" is a subjective decision. When complaints go to the Financial Ombudsman Service its remit is to decide what's "fair and reasonable". That means that while contractual wordings are fundamental, they aren't considered in isolation.
The challenge for an insurer is to apply the right balance in the way it handles claims. That means deciding what claims it's reasonable to pay taking account of what policy holders were entitled to think was covered by their policy; based on how products were sold, what the parties' intentions were, the clarity of insurance documents, the wording of the contract and, no doubt, some corporate level economic and customer care policy considerations. Ultimately, though, what is fair? It will vary across claim and policy types and may differ substantially between individual claims.
At Entry-Exit Consultants we can help. With many years experience of leading the ombudsman service's handling of insurance disputes John has an unrivalled insight into the interpretation of insurance claims and deciding what's a fair and reasonable outcome. Whether you need to develop a policy approach across a body of claims or need help to handle individual potentially high value cases. John's unique combination of operational and policy-setting experience in high volume and complex complaints handling, and insurance disputes specifically, is available to support you.
