Managing Claims during a Pandemic: Q&A with Head of Claims, Andrew Taylor

As we continue to observe the COVID-19 pandemic, we are still committed to supporting our clients through this difficult period. This is an unprecedented time which is causing some uncertainty with organisations and businesses regarding whether they can claim as a result of disruption caused by COVID-19.

Over the last few weeks our Claims Management team have listened to clients questions and provided answers and guidance concerning individual claims.

Our Head of Claims, Andrew Taylor has answered some questions for our clients that may provide some clarity on how your policy may respond. These have been answered in detail below.

What has Griffiths & Armour’s approach been to handling claims relating to COVID-19?

The COVID-19 pandemic has had profound consequences for all businesses no matter the size or scale, so it wouldn’t surprise many that some insurance brokers are potentially struggling to find sufficient resource to handle the additional enquiries and workload. I am aware that some have severed support previously offered to their clients with regard to any COVID-19 related claims. At Griffiths & Armour, our guiding principle has always been to put our clients interests first especially through difficult times and this continues to be central to our approach.

In order to support our clients with the significant challenges of the pandemic we are utilising the extensive experience of our in-house claims team to continue to provide advice and guidance to each and every client that requires individual support. We have also created a dedicated COVID-19 response team.  Their focus is to ensure we can thoroughly investigate, manage and agree individual strategies with clients that specifically relate to COVID-19 matters, ensuring consistency of response in dealing with Insurers and the common challenges they are putting forward.

What has the reaction been from insurers/the industry?

These are truly unique times for the insurance sector and some Insurers have reported a 200% rise in the number of claims reported.  It has been highly publicised that many policies will not respond to losses arising from pandemic disease as recognised by the industry regulator, in a letter to insurance company CEOs, the FCA said: “most policies have basic cover” and “do not cover pandemics, and insurers have no obligation to pay out in relation to the COVID-19 pandemic”.

For those clients with policy extensions that do provide cover, the Association of British Insurers (ABI) Select Treasury Committee’s early estimation suggested that £1.2 billion will be paid in claims, with business interruption claims accounting for almost £900 million.  The spotlight has been well and truly focused upon business interruption claims and ABI members have agreed principles for dealing with such claims.  Within these principles where policies have responded Insurers have been encouraged to make swift settlements or early interim payments.

Have any claims been paid for COVID-19 related incidents?

Insurers have already paid out millions of pounds for claims relating to cancellation of travel, wedding insurance and event insurance policies.  In relation to business interruption, only a small number of clients seem to have purchased extensions to their policies that may respond to this event, however my advice and that of my team has always been that every insurance policy is different and in the first instance I would highly recommend each business reviews the wordings of their policy carefully to ascertain whether or not your insurance may respond to the pandemic.

There has been a lot of talk about a challenge from the FCA, is this likely to change insurers stance in relation to these claims?

The FCA test case has generated a lot of interest and while many Insurers are taking part it should be noted that the parties have the right to appeal any decision made. Any appeal could potentially extend the process and therefore provide little relief to those clients looking for an immediate change in an Insurers stance. It should also be noted that, although a step in the right direction, the test case will not automatically resolve all disputes on this matter especially where the policy wordings in use by some insurers do not share the characteristics of those being used for the test case.

Our team will be continuing to monitor the ongoing process very closely and we will be responding swiftly to advise clients if this changes the current approach of insurers to policy wordings.

What should I be doing or preparing in case the situation changes?

As is the case with any claim I strongly advise you to keep accurate records and documentary evidence to support any costs/losses incurred. It is also advisable to speak to your main point of contact at Griffiths & Armour who can provide advice that is based on your specific requirements and on the best approach for your organisation to move forward.

What are the likely future impacts of these losses?

The impact of COVID-19 on the insurance industry cannot be understated.  In an earlier question we mentioned the ABI estimate £1.2 billion will be paid in claims. It is worth bearing in mind these payments are in addition to a reported £363 million already incurred following the recent storms (Ciara and Dennis). If you also add that reductions in economic activity may lead to less premium income, as well as likely reduction in investment income, potential reduction/delays in premium payments and reduced client numbers, this is likely to put insurers under more pressure in what is already a hardening insurance market.

Will cover be available in future for pandemics and COVID-19?

Highly unlikely, and I think many Insurers are also likely to look to strengthen policy wordings to specifically exclude pandemic related claims. The exposure is simply too large to be assessed and capitalised by insurers and is akin to the terrorism risk. That said, the industry is investigating an option to set up a similar insurance vehicle to terrorism with Pandemic Re which may be able to provide cover in the future.

What support is Griffiths & Armour providing to clients to help them deal with these issues?

In the early stages of the pandemic our priority was to ensure our operational capabilities and ability to provide our clients with the level of service they have come to expect was not affected by our transition to working from home. That was achieved and since then, there has been a huge amount of work carried out to help our clients deal with an incredibly fast moving and unchartered situation surrounding COVID-19.

Andrew Taylor, Head of Claims at Griffiths & Armour said:

Keeping our clients informed throughout has been vitally important and the client feedback my team and I have received has been heartwarming and most importantly, made a difference. We have also created a specific COVID-19 section on our website, where we have collated all published risk management advice issued through our regular client communications. This can be found here.

The situation is evolving in real time and we continue to service and support our clients as we always have, putting their interests at the heart of everything that we do.

In addition, we also continue to offer support via our online risk management platform, RMworks, where clients can access useful guidance documents and templates including back to work risk assessments and advice as they turn their attention to the important task of opening their businesses or increasing operational capability in their normal working environments.

If you have any questions on this article or would like more information or advice relating to claims, please get in touch with Andrew by clicking the CONTACT button below.