Ombudsman responds to loss adjuster calls to fast track Covid-19 BI test case


The Financial Ombudsman Service is prepared to progress a Covid-19 related complaint about business interruption cover as “quickly as possible” to help provide guidance to insurers and the growing number of disgruntled SME policyholders about what is - and what isn’t - covered.

However, the FOS would not be drawn on timelines or whether a claim could be fast tracked, an idea mooted this morning during the latest edition of the Insurance Covid-Cast by a pair of senior loss adjusters.

Concordia Consultancy chairman Paul May was first to highlight the plight of these SME policyholders with revenue below £6.5m that come under the FOS’ jurisdiction: “One of those companies should get their claim up and running and litigate it through the insurance company and then get the ombudsman to make a decision and possibly agree with the insurer that it will be fast tracked.

“So that businesses in that critical area where they don’t have resources to call upon and shareholders they can tap; that those business get the benefit of an FOS decision now, rather than 2026 when most of them will come out if past performance is anything to go by.”  

Fellow panellist Questgates head of major loss, Mike Ledgerton agreed: “It would be helpful, as a lot of these claims are going to end up with the FOS, if they could sooner [rather than later] give us guidance on specific issues, and how they would view them. Which would help us and prevent a lot more [complaints] going to the FOS because we’d have the guidance from them.”

Asked it was concerned about being flooded with BI claims unless it acts quickly, an FOS spokesperson told Post: “We believe our service is well placed to deal with any complaints that come to us. We’re preparing to progress cases as quickly as possible and we appreciate the need for clarify quickly.

“We’d encourage any SMEs who have a complaint and are not happy with how their insurer has dealt with it to come to our service and we will see if we can help.”

Quizzed about whether it would be open to running a test case, and if so what time frame would be realistic, the FOS spokesperson added: “We look at each case on its individual merits. We will consider what is fair and reasonable according to the individual circumstances of each case, taking account of what the policies say in each case.

“We are also in dialogue with businesses and industry bodies to discuss our approach to possible cases we might see, and how we might best explore those issues through our early decisions.”

Over the last fortnight Ecclesiastical, Hiscox, QBE Europe and RSA have been targeted by around 400 disgruntled businesses after their BI claims were rejected.

In terms of numbers the FOS spokesperson explained: “It’s too early for us to be seeing many complaints come through from SMEs related to Covid-19 – we’ve had a handful but nothing in any volume to speak of yet.

SMEs should complain to their insurance provider first, who will then have eight weeks to respond. If the SME isn’t happy, it will then be able to bring a complaint to our service and we will see if we can help.”

“We are working closely with external stakeholders, including regulators, consumer groups, financial businesses and trade bodies, to ensure we have a good understanding of the types of complaints our service is likely to see,” they added.

“We expect insurers to consider what’s fair and reasonable in the circumstances of any claim, taking into account government and industry guidance, and mindful of the unprecedented nature of the situation created by Covid-19. The financial providers we cover have a key part to play in mitigating the impact of Covid-19 on their customers.”


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