Business Interruption Insurance: Do I Have a Claim?

The Covid-19 Pandemic has had a devastating impact on the economy. Businesses are closed, staff are on Furlough leave and for many businesses turnover is significantly reduced. Understandably, businesses are turning to their insurance policies for financial assistance.

Business Interruption Insurance – Can I Make a Claim?

Business Interruption Insurance is a specific type of insurance that provides cover for lost profits and/or additional business expenses caused by a specified insured peril. If the insured peril occurs, the policy should cover for lost profits and/or additional business expenses arising from that peril.

One peril that is commonly covered is property damage. The policy may be triggered when there is loss of or damage to property that stops a business from being able to use property or use it fully. A Business Interruption policy may cover lost profits of the business whilst the property is repaired.

A potential argument arising from the Covid-19 Pandemic are that there is loss of property as businesses are unable to use their premises and therefore cannot trade from them. Another claim may arise where an infected employee attends business premises causing the premises to close whilst it undergoes a deep clean. A further claim may arise from a denial of access to premises arising from circumstances outside of your control. The validity of any of those arguments will depend upon the specific terms of your insurance policy.

Another peril that can be added to Business Interruption Insurance is an occurrence of an infectious or notifiable disease. Insurance policies differ on this with some remaining open-ended, whilst some others specify the list of infectious or notifiable diseases that will be covered. Insurers are resisting such claims saying that Covid-19 was not in contemplation at the time that the policy was taken out. Whether or not Business Interruption arising from Covid-19 as an infectious and/or notifiable disease will be covered will depend upon the specific terms of your insurance policy.

Can I Claim Against my Broker?

If your business does not have Business Interruption Insurance, or if the Business Interruption Insurance does not include sufficient scope to include the Covid-19 pandemic, it may be possible to make a claim against your insurance broker for professional negligence.

In any claim for professional negligence you are required to show that the professional breached the duty of care they owed to you and that the breach of duty has caused financial loss. It is important to note that an insurance broker is not a default insurer where there is a gap in cover. However, if you were not advised about Business Interruption Insurance or the advice provided to you did not include protection against circumstances arising from the Covid-19 pandemic, it may be possible to bring a claim against your broker.

In considering whether to bring a claim against your broker, it will be important to establish what advice you were provided with at the time the insurance policy was taken out and what information you provided to the broker about your business. The timing of the policy may also be important. If insurance was taken out at a time that Covid-19 was known about, the advice it was reasonable for your broker to provide you with may be different to if the policy was taken out before the outbreak of Covid-19.

Where a policy was taken out before the Covid-19 outbreak, it will be necessary to consider the scope of the work your insurance broker agreed to carry out. If the broker agreed to monitor your insurance during its term to assess the validity and effectiveness of it and failed to advise you about specific cover for Business Interruption Insurance after the outbreak of Covid-19, it may be possible to bring a claim against your broker.

Alternatively, if you provided information to your broker after insurance was taken out that affected the suitability of your insurance or if the outbreak of Covid-19 affected the suitability of your insurance and your broker failed to advise you properly, it may be possible to bring a claim against your broker for financial losses suffered as a result of the broker’s negligence.

Where an insurance broker has failed to provide you with advice about Business Interruption Insurance or has not advised you correctly about adequate Business Interruption Insurance you will be required to prove that any losses your business has suffered are suffered as a result of the advice you were/were not provided with and not any other reason. As always in claims of this nature, each case will be determined on its own specific facts.

If you would like advice about whether your Business Interruption Policy will provide you with cover or whether you have a claim against your insurance broker do not hesitate to contact our Dispute Resolution Team who will be happy to assist.

Call our team on 0800 988 7756 for a FREE initial discussion. We can set up a telephone or video conference in place of a face-to-face meeting.


signature

Signed, sealed, delivered? Email signatures and contracts

You may think that whether a document is signed or not would be obvious. However the High Court has recently looked at exactly this. Is an email with an automatic email signature, signed?

What is a signature?

The traditional definition of the word ‘signature’ is “your name written by yourself, always in the same way, usually to show that something has been written or agreed by you.” To sign, a person picked up a pen and inked a signature on to a page. With this, they confirmed that a letter or a document was their work or to their approval. However, all that changed with the development of technology.

Since the development of computers, letters and hard copy documents are slowly disappearing. Many businesses are switching to paperless or paper-light working environments. This means that even where the office receives hard copy documents, they transform them into digital form. Many accept a digital signature on a document as a suitable substitute for a physical signature and emails are the preferred method of communication

Neocleous v Rees

In the case of Neocleous v Rees the High Court looked at automatic electronic signatures at the bottom of emails. It ruled that an automatic email signature confirmed that the sender of that email associated itself with the contents of that email.

The case involved a dispute over whether a right of way existed over a piece of land. Prior to the final hearing of the case, solicitors acting on behalf of both parties exchanged various emails. They eventually reached an agreement on settlement of the case within this chain of emails. One of the solicitors, Mr Tear, sent the terms of that agreement via email to the other, Mr Wise. Mr Wise responded that he “confirm[ed] my agreement with its contents.” At the bottom of both emails were the solicitors’ electronic signatures.

Mr Tear later argued that, because he did not physically sign his email and it was automatically added, the previous agreement was not valid. The Court rejected this argument and said that an ordinary person would consider that by storing their details as an electronic signature they did so intending to sign every email.

Be careful!

We often take the ease and convenience of emails for granted. This case serves as a reminder to think twice about what is sent via email and what the implication of the contents could be. You may find yourself responsible for something you did not intend! If you have any concerns about a signature on a document, our dispute resolution team can help. Call us today on 0800 988 7756 for a FREE initial discussion.


legal advice

The value of going to a solicitor for legal advice - Q & A

We participated in #SolicitorChat on Twitter last week, answering questions about the value of seeking legal advice from a solicitor. Our new addition to our Dispute Resolution team, Gemma Horner, was on hand to answer the questions. If you were not able to follow the chat live, we set our answers out below:

1. Tell us about your role as a solicitor and what a typical day looks like for you.

I am a newly qualified solicitor in the dispute resolution team and deal with commercial and personal disputes. I recently joined the team and currently assist senior members of staff with the day to day running of their files. This includes writing and speaking to clients, updating them on progress or providing advice; liaising with opponents and third parties (like the Court) as required.

On a typical day I arrive before the office opens and check my emails and any overnight voicemail messages. I then go through my to do list and prioritise tasks before starting to work on the files. As the day progresses, I speak to clients and chat to people who have enquiries and might want to instruct us to assist them.

2. Why is it important to give tailored and unique advice to clients?

Every client’s case is different and personal to them. Although two cases may seem broadly similar, for a client to seek legal advice there is usually a personal element to the case. Two clients with similar issues may not want the same outcome and there are often a number of different ways to reach the client’s desired objective. In understanding each client we can give them tailored advice to suit their requirements

3. Why is it important to spend time building a relationship with your clients?

To advise clients we need to have all the facts/background info. By spending time building a relationship, we develop a level of trust which encourages clients to give us all the information we require, rather than the information they think we want to hear. This means we can weigh up the benefits and risks of any course of action and to give pragmatic, tailored advice about how to attempt to resolve a dispute, taking into consideration all the material facts of the case.

3a. With a client who might find the concept of speaking to a solicitor intimidating, how do you go about building trust?

We understand that for many people facing a dispute, talking to a solicitor is the last resort. We make sure that everything is explained in a straightforward manner and answer all queries they have. Our solicitors are always personable and don’t talk in legal jargon.

4. How do you feel your legal advice provides value for money for clients?

We give tailored, bespoke advice to every client. For example, some clients want financial settlement; others would like an apology for a wrong they’ve suffered. My advice outlines the options, potential risks, costs and range of possible outcomes. We often see clients who have come to us later down the line and the dispute has worsened, meaning that the costs of resolving it can be greater. Seeking our legal advice early doors therefore provides great value for money.

5. In your opinion, what is the value of seeking legal advice from a solicitor rather than an unqualified legal provider or taking a DIY approach?

Solicitors are highly qualified and usually specialise in an area of law. We are also regulated. A solicitor can give you accurate advice about your potential claim. Unqualified legal providers may not be regulated or updated on the current law. People tempted to DIY should be aware that legal information online is often not up to date and there is no guarantee that the information provided is accurate. If in doubt, seek a solicitor’s advice.

If you would like to speak to one of our solicitors, call us on 0800 988 7756 for a FREE initial chat.