The sixth anniversary of COVID-19 being declared a notifiable disease has now passed. Businesses with unresolved insurance claims should have entered standstill agreements to preserve the right to pursue litigation.
COVID-19 was declared a notifiable disease in the UK on 5 March 2020. From 16 March 2020 the UK Government issued instructions to stay at home and from this point forwards businesses across the country suffered interruption.
Businesses across all sectors were impacted by the pandemic, with subsequent losses caused by government-ordered closures, tiered restrictions and disruption to normal operations. The restrictions differed across sectors, but restrictions on social interactions nevertheless impacted behaviour and contributed to the loss suffered by all.
While some policyholders were ultimately successful in recovering losses following legal clarification of policy wordings, many businesses were unable to recover losses where policies did not respond to such an unprecedented event.
Cathy Harris, partner and litigation specialist at Clarke Willmott LLP, continues to act for businesses pursuing BI insurance claims arising from the pandemic, and is representing businesses with ongoing claims.
Cathy said: “Unfortunately, many businesses suffered substantial losses during the pandemic but found that their insurance policies did not provide the cover they expected. Others may still be pursuing claims without realising that limitation on parts of the claim has now passed.”
Some businesses may still be challenging insurers directly, via brokers, or with advisers who may not be actively progressing matters to protect limitation. Without issuing proceedings or taking appropriate steps to preserve claims, potential recoveries could be lost.
Cathy urges businesses with unresolved COVID-19 insurance claims to take immediate action:
“Ideally businesses with unresolved insurance claims will already have entered into binding standstill agreements with insurers. If they have not, they should seek urgent legal advice. The 6-year limitation period that applies to insurance claims runs from the date of loss. Entering a standstill after 23 March 2026 is not fatal to the entire pandemic loss, but delay will result in a reduction in any eventual payout and may result in specific periods of loss being wiped out regardless of merits.
Insurers will be alert to the clock that is now ticking and the impact that this has in reducing the value of the claims. Businesses should therefore ensure that a standstill is entered as soon as possible or alternatively issue court proceedings.”
If a business is concerned that its advisor or representative has not taken steps to preserve its claim, Cathy can advise on the remedies available, both in terms of devising a strategy which seeks to safeguard as much of the remaining claim as possible, and in considering whether there is any remedy against the advisor.
Speak to a specialist
Businesses are advised to seek specialist legal advice as soon as possible to assess their position and preserve any remaining rights before limitation expires. Please contact Cathy Harris on 03452091154 or send an enquiry.
Posted:
