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The Covid-19 pandemic has had a negative financial impact on numerous businesses operating across this island and many businesses are questioning whether this negative impact is covered by their business interruption insurance policies.

The UK Supreme Court has upheld an appeal of the business interruption test case brought by the Financial Conduct Authority and ruled that insurance companies, in certain circumstances, are required to honour business interruption claims arising because of the Covid-19 pandemic.

The Commercial Court in Ireland delivered its judgment in relation to a well-publicised test case taken by four businesses operating public houses against FBD Insurance. The judgment of the Commercial Court found in favour of the Plaintiffs that their business interruption insurance policies covered losses arising from the closure of their businesses under governmental restrictions to combat the Covid-19 pandemic. That litigation is ongoing in relation to a number of quantum related issues. 

The first key question is whether or not a policyholder is covered for Business Interruption arising from the impact of the Covid-19 pandemic. This will depend on the specific wording contained in the relevant insurance policy.

What You Should Do Now

  • Review your business’ insurance policy to determine the extent of your business interruption cover. This may involve you liaising with your broker, your solicitor or reviewing it yourself in the first instance.
  • Consider whether Covid-19 has negatively affected your business activities and profits.
  • Identify, review and collate all relevant supporting documentation (i.e. most recent audited financial statements, monthly management accounts, budgets and forecasts, etc.). The supporting information and documentation are likely to be required for carrying out an assessment as to the quantum of a potential claim, both by your independent advisor and by the relevant Insurer providing insurance cover.

How Can Grant Thornton Help

  • Grant Thornton’s Forensic and Investigation team has extensive experience in calculating loss of profits claims arising from business interruption across a variety of sectors, including hospitality, sporting, recreation and tourism industries operating and based throughout the island of Ireland. We have experience in Covid-19 insurance claims.
  • We offer a wide range of services and professional assistance in identifying; relevant documentation, claim periods and business trends that can be used to assist in quantifying losses incurred by your business arising from the impact of the Covid-19 pandemic.
  • If you think you or your business may have a claim for business interruption as a result of Covid-19 please do not hesitate to contact a member of the Grant Thornton Forensic team who can provide assistance with what can often be both a time consuming and complex
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