8 September 2021

What does Business Interruption Insurance cover?

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In a nutshell, Business Interruption Insurance covers a business for the loss of income it has suffered. Such a loss would have had to have been as a direct result of the business having to restrict its activities or close due to the occurrence of certain events.

Many businesses’ activities have been interrupted as a direct result of the Covid-19 pandemic. As a result of such interruptions, many businesses have suffered a loss of income. Businesses with valid business interruption insurance policies have made claims to their insurer. Each policy will have its own unique wording with regards to what it can cover, and so some businesses have found success in their policy, whilst others have not.

Why are insurers rejecting business interruption insurance claims?

The FOS has seen a rise in complaints regarding how insurance companies and brokers have been handling their cases relating to business interruption insurance. Such complaints have ranged from why a claim was rejected, to disputed sums of redress. Insurance companies have rejected claims of business interruption insurance for various reasons, including (but not limited to):

  • The business interruption insurance term in the policy was non-existent.
  • The business interruption insurance policy does not include Covid-19, but rather a set list of diseases the insurers deem to be infections.
  • The business interruption insurance policy fails to provide cover, other than in the context of a ‘public emergency’ in local areas (usually a set radius), which has to have restricted access to the premises.
  • The business interruption insurance policy only provides cover if the interruption resulted from a case of Covid-19 at the premises. This matter is more to do with the evidence insurers are accepting.

What does this all mean?

In summary, it remains for the policyholder to consider how the established principles from the detailed Supreme Court judgment apply to their individual business circumstances. It also remains for the policyholder to review their business interruption insurance policy wording in full and establish whether they qualify. The policyholder also needs to calculate their liability and evaluate the loss they have suffered accurately.

How can Connaught Law help me?

If you remain unsure you can always get in touch with us, where we can navigate and assist you in the matter, from start to finish.

We are now also offering a full review of your business interruption insurance policy for a fixed fee. This service will equip you with the merits of the policy, should you wish to make the claim by yourself.


The information in this blog is for general information purposes only and does not purport to be comprehensive or to provide legal advice. Whilst every effort is made to ensure the information and law is current as of the date of publication it should be stressed that, due to the passage of time, this does not necessarily reflect the present legal position. Connaught Law and authors accept no responsibility for loss that may arise from accessing or reliance on information contained in this blog. For formal advice on the current law please don’t hesitate to contact Connaught Law. Legal advice is only provided pursuant to a written agreement, identified as such, and signed by the client and by or on behalf of Connaught Law.

About the Author

Saad Abbas Hussain heads the Financial Disputes and Banking department at Connaught's. He has accumulated extensive industry experience within dispute resolution, regulation, and financial services, having previously worked for the Financial Conduct Authority (FCA) and the Financial Ombudsman Service (FOS).

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