Beazley accused of stalling as BI claim disputes head to court

Beazley has come under pressure for its handling of business interruption (BI) claims related to the Covid-19 pandemic, as litigation intensifies and criticism mounts over delays and the clarity of cover.

Chris Guy, director and head of business interruption litigation at RLK Solicitors, told Insurance Times that claims against Beazley remained unresolved more than four years after they were first notified.

He said: “Our clients and this firm notified these claims in 2020 and they are still no further, despite the legal landscape changing so much in the favour of policyholders during this time. Indeed, court proceedings have had to be issued as the six-year limitation is fast approaching.”

Guy represents several small businesses pursuing Beazley for losses incurred during lockdowns, which they argue were covered under policy clauses related to denial of access caused by public authority action.

He pointed to a summary document issued with Beazley policies that describes cover for “a public authority incident occurring within a one mile radius of your premises which results in prevention or hindrance of access to the premises”.

Guy said this wording gave small firms the impression they would be protected in the event of pandemic closures.

“Reasonable small business owners would interpret this wording as providing cover,” he added.

Guy also alleged that Beazley’s conduct amounted to stalling, referencing the lack of progress despite regulatory clarity following the Supreme Court’s ruling in the FCA’s BI test case in January 2021.

He continued: “Generally speaking, their behaviour in handling and considering these matters falls far short of their obligations to treat their policyholders fairly and act in their best interests.”

Beazley declined to comment on the case. A spokesperson told Insurance Times: “We do not comment on ongoing litigation.”

‘Their business would have survived’

Following the January 2021 judgment, the FCA issued a letter instructing insurers to reassess and promptly pay valid claims – including interim payments where appropriate.

The regulator stated that it expected firms to avoid delays that could exacerbate financial hardship and reiterated that previously rejected assessments or pandemic-related limitations should not disadvantage businesses with valid claims.

The FCA also called on insurers to be transparent in their communication and to avoid enforcing strict time limits on Covid-related BI claims in ways that could unfairly disadvantage policyholders.

Beazley has not disclosed the number of disputed or settled claims. However, Guy claimed that some claimants had been unable to join ongoing litigation because their businesses had already dissolved due to financial pressure.

“If they had been honoured cover by Beazley at the time, then their business would have survived,” he said.

Beazley’s standard BI offering includes interruption caused by property damage at the insured premises, as well as nearby access restrictions and utility failures lasting more than 24 hours.

Cover also extends to public authority incidents within a one-mile radius and contamination or bodily injury events, such as vermin infestations or foodborne illnesses.

However, the insurer excludes claims in cases where a business has permanently closed or a liquidator has been appointed – exclusions, Guy said, may penalise firms driven to insolvency by delayed or denied payments.

The FCA’s May 2025 update confirmed that its 2021 letter continued to represent its expectations for insurer conduct in BI cases, even though the document was no longer current for supervision purposes.

The regulator also reminded insurers to avoid procedural barriers and to communicate clearly with affected customers, ensuring that any past settlements were reached fairly and with a full understanding of the implications of the test case.