The SME is teaming up with its broker to mount a challenge against the insurer

Norfolk-based SME Bure Valley Railway is preparing to mount a challenge against insurer MS Amlin for refusing to pay out on a business interruption (BI) claim related to the Covid-19 pandemic – despite policy wordings covering “any notifiable disease within a radius of 25 miles of the premises”.

Bure Valley Railway director Andrew Barnes told Insurance Times that proving this trigger was “not a challenge” as the railway is located “13 miles from the Norfolk and Norwich University Hospital, which had confirmed cases at the time we submitted our claim and this was a matter of public record”.

The business’s insurer MS Amlin, however, has rejected the claim. Barnes explained: “They couldn’t make a settlement under that policy because the losses were not as a result of Covid-19 within the prescribed distance of our premises, they were as a result of the government restriction in the movement of people and it naturally followed that that was an uninsured risk. We strongly disagreed with that.”

With the support of his broker, Towergate Insurance Brokers, Barnes has now appointed London insurance dispute resolution firm Flaxman Partners to mount a challenge refuting his claim rejection.

“The policy we have only covers us to £500,000, but what that would have done is given us sufficient revenue to protect our staff over the winter, so I think some people have been saying ‘oh you just want to claim on the insurance, get rich quick’. No, we’re not here to get rich quick. We’re here to survive,” Barnes added.

“It’s not a moral crusade, but it is a matter of principle now.”

The railway recorded a 65% dip in travel tickets in March, related to the coronavirus outbreak.

‘Treated badly’

Former CII vice president Branko Bjelobaba, now principle at general insurance FCA compliance consultancy Branko, has reviewed Barnes’s policy wordings – he concluded that Bure Valley Railway was “being treated badly”.

“Many insurers are not really helping themselves and I am sure that BIBA, LIIBA (London and International Insurance Brokers Association), et al are doing much behind the scenes to remonstrate with them,” Bjelobaba said.

Responding to Insurance Times regarding Barnes’s claim, a spokesperson at MS Amlin said: “We are not able to comment on individual claims, but we do understand the challenges that our clients are facing during these extraordinary and uncertain times and are also monitoring government and regulatory guidance.

“We take our responsibility to support our policyholders extremely seriously and are committed to investigate each claim carefully on a case by case basis and meet all valid claims.”