Local Leicester lockdown could prove ‘difficult for insurers’ defending rejected BI claims

By Katie Scott2020-07-03T16:11:00

Business interruption policies triggered by Covid cases at the insured premises, or within a defined radius, may come under closer scrutiny as city-centric lockdown confirms the local impact of the pandemic

According to the defence documentation submitted to the FCA for use in its upcoming test case, some insurers – such as Ecclesiastical and MS Amlin – have rejected business interruption (BI) claims on the basis that Covid-19 is a pandemic, affecting the UK and the world, therefore the outbreak does not constitute as a single local occurrence, or incident within a specified radius - this, in turn, means that Covid-19 is not considered an insured peril.

But, could this line of thinking suddenly come under further scrutiny following the government placing Leicestershire in a localised coronavirus lockdown from 29 June, in response to a surge of Covid-19 cases?

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