Coronavirus - helping policyholders

Loss of income

The cover provided by section 4 - loss of income of a Congregational church policy predominately provides cover for loss of income resulting from the interruption of or interference with the usual activities carried out at the premises following an incident of insured damage to the church. 

Please contact your broker or call the Congregational church department on 01274 700 700 9am - 5pm Monday to Friday, if you wish to discuss further.

 

9 February 2021 Impact of the Supreme Court Judgment

We are pleased to confirm that the Supreme Court Judgment has provided a framework by which we can now proceed to deal with claims for loss of income and we will be following the recommended approach set out in the FCA's Draft Guidance on Proving the Presence of COVID-19.

We would like to thank all of our policyholders for their patience whilst we awaited the outcome of the Test Case.

We are currently in the process of writing directly to all of the policyholders that have made claims in respect of COVID-19 to confirm the next steps to progress their claims.

If you are a Church Choice policyholder and you need to make a claim for losses associated with COVID-19, then please write to us at claims@congregational.co.uk so that we can provide you with further information.

If you would like further information in relation to the test case please visit:

The FCA business interruption insurance page
or The Financial Ombudsman Service

 

15 January 2021 Judgment

The Supreme Court's Judgment in the Financial Conduct Authority's (FCA) Test Case was handed down on 15 January 2021 and is now available on the Supreme Court website: https://www.supremecourt.uk/news/latest-judgments.html.

The purpose of the Test Case was to review a representative sample of business interruption insurance policies to establish whether they would provide cover for losses associated with Covid-19 and the national response to the pandemic. Congregational was not chosen to participate in the Test Case and so our policy wordings were not reviewed by the Court. It is the intention of the FCA however that the Test Case will provide guidance that will assist the wider insurance market. We are committed to following this guidance.

The Supreme Court Judgment is the final resolution of the Test Case. It cannot be appealed.

We are currently reviewing the Judgment carefully and considering its implications for all of our policy wordings. We will communicate directly with individual policyholders that have submitted a claim enquiry to us.

Further information about the Test Case and the Supreme Court Judgment is available via the FCA's business interruption webpage: https://www.fca.org.uk/firms/business-interruption-insurance

 

2 November 2020 Appeal

The Supreme Court granted permission to the FCA, the Hiscox Action Group and six of the eight insurers participating in the Test Case to appeal the Judgment of the High Court. This means that the appeal will be considered by the Supreme Court directly rather than via the Court of Appeal.

The two insurers that are not participating in the appeal are Ecclesiastical and Zurich. The High Court decided that their representative policies did not respond to losses associated with nationwide measures to prevent the spread of Covid-19. The FCA is not challenging this decision.

RSA is participating in the appeal but has confirmed that it will not appeal the High Court's Judgment in respect of the representative sample wording known as 'RSA 4' or 'Resilience'.
The organisation known as Hospitality Insurance Group Action has confirmed that it will not participate in the appeal to the Supreme Court.

The Supreme Court will hear the case over four days starting on Monday 16 November 2020.

We do not yet have information as to when the Supreme Court will publicise its decision about the outcome of the Test Case but, it may not be before January 2021.

 

2 October 2020 Appeal

The High Court granted the following party's permission to appeal:

• The FCA.
• Six of the eight participating insurers.
• The Hiscox Action Group.

The High Court has agreed that these parties can appeal the Judgment directly to the Supreme Court. This is called a 'leapfrog' appeal because the case will pass directly from the High Court Judgment to the Supreme Court without being considered by the Court of Appeal.

The Supreme Court will also need to confirm whether it will agree to hear the appeal before it can proceed. We are currently awaiting further information as to when the Supreme Court will make its decision.

If the Supreme Court does not agree to hear the appeal directly from the High Court, then the appeal may be considered by the Court of Appeal instead.

The subject-matter of the appeal relates to the High Court's interpretation of the representative sample insurance policies put forward by the participating insurers and whether these policies will provide insurance cover for losses associated with the Covid-19 pandemic and the nationwide measures taken by the UK Government to prevent the spread of the disease.

The grounds for appeal relate to the findings in relation to the construction of the disease clauses and causation and as such directly impact on the wording of Congregational policies. As a result, we will need to await the outcome of the appeal.

We are currently awaiting further information about timescales, but we would expect an appeal to take several months to reach a conclusion. If the appeal is heard by the Supreme Court, then we anticipate that its decision will be available in January 2021.

The FCA has published a draft transcript of the hearing on 2 October 2020 its website: https://www.fca.org.uk/firms/business-interruption-insurance.

 

15 September 2020 High Court Judgement

The High Court's Judgement in the Financial Conduct Authority (FCA's) Test Case was published online on 15 September 2020. The Judgement can be accessed here: https://www.fca.org.uk/firms/business-interruption-insurance.

The purpose of the Test Case was to review a sample of representative business interruption insurance policies to consider whether they would provide cover for losses associated with Covid-19. Congregational was not chosen to participate in the Test Case and so our policy wordings were not reviewed by the High Court. It is the intention of the FCA however that the final resolution of the Test Case will provide guidance that will be of assistance to the wider insurance market. We have confirmed that we intend to follow this guidance.

The High Court's Judgement is an important step in the progression of the Test Case but we will not know if it is a final resolution until the Court has confirmed whether there will be any appeals. This will be a decision for the Court to make in a further hearing. We do not yet know when this hearing will take place and will publish a further update when details are made available.

We are currently reviewing the Judgement and await further information about whether there will be an appeal and, if so, its scope.

If the Judgment is not going to be appealed then we will promptly review its implications for all of our policy wordings. We will communicate directly with all individual policyholders that have submitted a claim enquiry to us.

 

1 May 2020 FCA Test Case 

The Financial Conduct Authority (FCA) announced plans to seek legal clarity on insurers interpretations of business interruption policy wordings relating to the Covid-19 pandemic. This involves independently examining several sample wordings in court.

On 1 June 2020, the FCA confirmed the wordings they intend to review. Congregational policies were not selected to form part of the representative sample, however the intention of the FCA is, that upon final resolution the Test Case will provide guidance to other insurers in respect of similar wordings. It is our intention to follow that guidance. 

This means that when the Test Case is resolved, we will apply the guidance the Test Case outcome provides on policy interpretation, to all claim enquiries received. This includes those where a final decision has already been communicated and any future claim enquiries. 

We welcome this development and the clarity the test case will bring for our policyholders. 

The FCA have published the principal next steps and timelines for how they envisage the Test Case to proceed, which sets out their expectation for the court hearing to begin on 20 July 2020.  

We will communicate this update to all policyholders that have submitted an enquiry about a claim for loss of income arising from Covid-19 by 15 July 2020. We will also confirm this position to any new claims enquiries that may be received and provide further updates within one week of the following events: 

- when all judgements at first instance or appeals on substantive issues in the test case are given;
- when the test case reaches final resolution and;
- at any other significant development in the test case that may be relevant.

When the outcome is known we will promptly review the implications for all our policies and communicate individually to policyholders that have submitted a claim enquiry.

 

23 March 2020 Cover provided by a Congregational policy in relation to Covid-19

The Government ordered the closure of all places of worship and banned all gatherings of more than two people in public and social events, including weddings, baptisms and other ceremonies. 

Covid-19 was declared a notifiable disease throughout the UK on the following dates: 

- Scotland - 22 February 2020; 
- Northern Ireland – 29 February 2020;
- England - 5 March 2020; and 
- Wales - 6 March 2020.

Cover will only apply for losses claimed after Covid-19 became a notifiable disease where your church can show there was a local outbreak and suffered loss of income solely as a direct result of that outbreak. 

Losses as a result of a national lockdown are not covered.