Not upheld: claim refusal / policy interpretation - business interruption insurance complaint against INTACT INSURANCE UK LIMITED

Decision detail

Summary

Miss W, who operates a B&B, claimed business interruption losses under her INTACT Insurance policy following the Government-ordered closure during the Covid-19 pandemic in April 2020. INTACT refused the claim, maintaining its position after the FCA test case and subsequent Court of Appeal judgment in the Excel case. Miss W argued the policy should cover closure ordered due to Covid-19 in the vicinity of her premises, not just at the premises itself, and that the manifestation requirement was impractical and absurd. The ombudsman upheld INTACT's refusal, finding that the policy clearly requires manifestation of Covid-19 at the premises and Miss W provided no reliable evidence of this. The Excel case did not change this requirement, and a reasonable person would have understood the policy to require disease evidence at the premises when it was entered into before Covid-19 was identified.

The Ombudsman's reasoning

The ombudsman determined that Miss W's policy explicitly requires manifestation of Covid-19 at the premises for cover to apply. The Excel case, while relevant, does not change this requirement as the parties in that case had already accepted Covid-19 had occurred at their premises. The Supreme Court's guidance on 'manifestation' (positive test or displayed symptoms) supports the interpretation that someone must have been diagnosed or displayed symptoms at the premises. Miss W failed to establish this on the balance of probabilities. The size and open nature of her premises does not justify disregarding the policy terms and applying a radius test instead. A reasonable person entering the contract before Covid-19 was identified would have understood the policy only covered closure if disease was evidenced at the premises.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website