The Financial Ombudsman Service (FOS) has published some operational information about their service that might be helpful for businesses, and sets out some detail about their approach to complaints caused or affected by Coronavirus.
In relation to travel insurance
The FOS will pay particular attention to:
- individual circumstances, policy terms, when bookings were made and when the policy was taken out;
- whether consumers have already been able to recover financial losses from their airline, tour operator, bank and/or credit card company;
- foreign and domestic government information about travel restrictions in the same way as the FCO advice, taking account of policy terms; and
- self-isolations and cancellations due to sickness in the same way as they do with ‘travelling against medical advice’.
The FOS expect insurers to take a pragmatic view of decisions not to travel or to curtail a trip and expect consumers to be treated fairly and encourage insurer’s to give careful consideration to the available evidence including credible consumer testimony.
In relation to business protection (interruption) insurance
When looking at claims that arise from something related to the coronavirus, the starting point remains the terms of the policy the business has taken out. If the claim falls within the scope of the cover, the insurers should either pay the claim in line with the terms and conditions – or explain why an exclusion or condition in the policy means that it doesn’t need to do that.
Insurers should not just apply a strict interpretation of the policy terms but what’s fair and reasonable in the particular circumstances – taking into account the unprecedented situation that the response to coronavirus has created. Insurers should take into account government and industry guidance.
In relation to wedding insurance
The FOS consider what’s fair and reasonable taking into account all the circumstances – in particular the unprecedented situation created by the Covid-19 epidemic and expect any insurer to remember its duties to deal with claims fairly and promptly, and not to reject a claim unreasonably.
Some issues the insurer might want to take into account are:
- Does the policy provide cover for cancellation or rearrangement?
- Does it cover claims arising out of an outbreak of infectious of contagious disease?
If it does, but the insurer is relying on an exclusion, then some points to note are:
- Is that term defined in the policy and is it clear that the current situation falls under it?
- If it isn’t defined, with the general meaning of those words is it reasonable to apply it in the current case?
- If the exclusion does apply, would the wedding have been able to go ahead – or would it have been cancelled in any case due to Covid-19? In which case it might not be fair to rely on the exclusion.