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Firms with business interruption cover advised to note covid losses

Firms with business interruption cover advised to note covid losses

Monday 09 August 2021

Firms with business interruption cover advised to note covid losses

Firms in Jersey with business interruption insurance are being advised to keep accurate records of financial losses caused by covid in order to make a claim.

These claims should then be submitted as soon as possible to avoid being time-barred.

The advice has been given by law firm Viberts. Michael Wakeham, who is part of the firm’s litigation team, said: “As of July 2021, insurers in the UK had accepted 40,531 Business Interruption claims and were considering the validity of a further 6,900 BI claims. 

“According to the latest Financial Conduct Authority data, insurers have paid out over £875m in respect of BI claims since the conclusion of the Test Case [which established the legal framework around covid-related BI payments]. 

“While no comparable data for BI claims in the Channel Islands has been published, the CI Financial Ombudsman is expecting BI claims to rise significantly in the second half of 2021.

Mr Wakeham continued: “If Jersey businesses have submitted a formal complaint to their insurer but are dissatisfied with the response, next steps will depend on the size of the business. 

“Jersey businesses that are eligible to submit a complaint to the CIFO - those with less than a €2m annual turnover and fewer than ten full-time equivalent employees - should consider this option, bearing in mind that the CIFO can make binding awards of up to £150,000. 

“The CIFO reported that it has secured additional resources to help manage the expected influx of Jersey BI claims. This should help the CIFO resolve BI complaints expediently. 

“Jersey businesses that do not fall into the above category and have an annual turnover of less than £6.5million - but more than €2m - and a balance sheet total of less than £5m or fewer than 50 employees may wish to consider referring their complaint to the UK Financial Ombudsman if their insurer is based in the UK.”

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