Biba members have said that a 12-month indemnity period is not long enough
Biba Manifesto 2022: Biba has called for more clarity around and a reform of business interruption (BI) insurance for firms that have made claims during the Covid-19 pandemic, according to its 2022 manifesto, which launched yesterday (25 January 2022).
Within the innovation, regulation and change chapter of the managing risk-themed document, the trade body has called on the insurance industry to come together to help progress BI insurance so that it can continue to remain accessible and relevant for organisations.
It has also recommended that BI policies should have a 24-month indemnity period where possible and for customers to be made aware of this time frame. Biba members told the trade body that in their experience, a 12-month indemnity period was potentially not enough time, especially following the FCA’s test case.
New parametric style policies could prove useful within the BI marketplace too, Biba noted.
BI is complex
Biba’s manifesto outlined its support of the Chartered Insurance Institute’s Transparency Forum, as well as Lloyd’s of London’s product simplification tool, highlighting that there is a greater need for clarity around BI policy wordings.
For example, firms that made claims linked to the pandemic sometimes referred to business “disruption” or “recovery”, rather than “interruption”.
Biba stated: “BI insurance is complex. There are many options and extensions, such as sub-limits, variable indemnity periods and non-damage BI, which means products are flexible but have different claims triggers.
“We will work with members on new guidance about business interruption insurance, to help make things clear to our customers.”
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Manifesto 2022: Business interruption insurance needs more clarity – Biba