The Financial Conduct Authority (FCA) is undertaking a test case in the High Court to examine how insurance policies react to non-damage business interruption COVID-19 claims and will seek to give clarity on how claims should be considered. Once the hearing is concluded, a Court ruling will be made and formally released. 

On receipt of this ruling and guidance notes from the FCA, Allianz will undertake a review to see what impact these have on our claims decisions and will process in accordance with the FCA guidelines. There is no action required by the customer or the broker.

We welcome the steps outlined by the FCA. This is a sensible approach and a useful exercise that will help to provide certainty for ourselves and our customers, allowing any disputes to be resolved more quickly.

The COVID pandemic has thrown a spotlight on the interpretation of policy wordings for viruses such as COVID-19 and it is a challenge for the industry as a whole. At Allianz we are committed to providing a fair and reasonable approach to handling COVID claims and have been encouraged by the support and discussions we have had with our brokers. We believe by having a collaborative approach we will be able to react quickly following the FCA judgement and, with the help of our brokers, we will be able to obtain relevant information in support of customer claims which will be crucial in achieving a prompt settlement. 

We’ve published the information below to help brokers and policyholders understand the COVID-19: FCA Files Business Interruption Insurance Test.

The Financial Conduct Authority (FCA) has published its finalised guidance for insurers, which sets out the terms of its test case regarding business interruption (BI) claims and complaints.

The FCA ‘test case’ refers to the legal proceedings brought by the FCA to ensure clarity on whether certain non-damage business interruption insurance policies respond to claims relating to the Coronavirus pandemic. It aims to support both policyholders and insurers by providing certainty on key contractual and ‘causation’ issues. 

We’re committed to keeping customers impacted by the test case informed throughout the process. For customers with ‘relevant non-damage business interruption policies’, we’ll be in touch should there be any change to previous communications we’ve sent. The FCA guidance states that communication of this type is only required for policyholders with relevant non-business interruption policies. Please note that direct communication on individual claims may come from us or via brokers.

We’ll post any key developments from the test case on our website. The FCA website contains full details of progress and the ability to subscribe to email updates from the test case. Information is also available on the Financial Ombudsman Service (FOS) website.

If your customer is unable to open for business due to any Government enforced lockdown and the length of enforced closure triggers the unoccupancy condition on their policy, this condition will apply but there’ll be no restriction in cover and we will not charge an additional premium for the unoccupied period. You do not need to notify us that your customer’s premises are unoccupied.

If your customer is able to open for business under Government guidelines but chooses to remain closed due to Covid-19 the unoccupancy definition and condition on their policy will apply including any cover restrictions; however we will not charge an additional premium for the unoccupied period. You must notify us that your customer’s premises are unoccupied.

Where Government or local travel guidance means that travelling to unoccupied premises would breach regulations, we understand that complying with the unoccupancy conditions will not be possible.

We expect your customers to take all necessary steps to protect their premises, including complying with their policy’s unoccupancy condition.  Where this isn’t possible for any reason, please inform your usual Allianz contact as soon as possible.

Where it isn’t feasible for your customer to comply, we will show flexibility, including:

• we’ll consider ‘immediately’ to mean ‘where practicable’ where the condition stipulates ensuring that any defects in the condition or state of repair of the building or any defects in security, alarm or fire protection installations are rectified, remedied or repaired immediately
• we’ll take a pragmatic approach and agree mutually acceptable timescales for risk improvements, as detailed in COVID-19: Risk Improvements.

To help mitigate the likely losses from escape of water that are prevalent in the colder months, we would ask that customers maintain heating of the premises at a minimum of 5 degrees Celsius, or arrange for the water systems to be isolated and drained down. Additional guidance on how to prepare for the cold weather can be found here.

For details of our Unoccupancy Conditions per product, please refer to our product pages.  

For contract sites, the Contract Works section of our Allianz Construction Select policy already provides cover for a period of 90 days whilst there is cessation of works and this will not be extended.

If you’re a licenced taxi or private hire vehicle (PHV) driver and have Allianz hire or reward insurance in place, you do not need to contact us to extend your existing cover while driving your insured vehicle to carry parcels, medical supplies, household goods, groceries or takeaway meals during the Covid-19 restrictions. We have chosen to extend this cover beyond the end of the current lockdown period and into next year, until 21st June 2021.

If your customer requires support in these challenging times, please contact your usual Allianz representative to discuss what alternative support we may be able to provide. Under some circumstances an adjustment to the cover required may be available and / or we may be able to assist with deferred payments.

The Coronavirus Resource Hub has been updated with financial guidance and support links available to customers and clients.

The Government Job Retention Scheme may provide wage roll payments to employees who are ‘furloughed’ by your customer. Once an employee is furloughed, they’re unable to work in a capacity which either makes a profit or provides a service to the employer. However they’re able to perform activities such as learning and development, volunteering, and the execution of regulatory responsibilities, whilst continuing to remain an employee of your customer. The requirement for Employers’ Liability insurance remains as does the exposure, albeit it’s reduced to non-manual and mental health in nature. The Government Retention Scheme has currently been extended until March 2021.

We expect exposure estimates for furloughed employees to be included in wage roll estimates and declarations.

For our mid-corporate products estimates should include furloughed payments as a separate item and will not be charged for during the temporary pause in working.

For our packaged products premium is calculated in a different way. Products which rate on wage roll may be adjusted to capture furlough wage estimates (on an annualised basis) as clerical wage-roll during the temporary pause in working. Products which rate per capita may be adjusted to reflect the actual number of employees not-furloughed through the temporary pause in working down to a minimum of one.

Your customers can find out more about supporting their people on the Allianz COVID-19 resource hub.

We’re aware that the Government’s recent decision to extend restrictions to further areas of the UK will impact some customers, who may consider making new claims for Business Interruption.

As was the case with the March restrictions, most of our policies do not extend to cover these losses. Policies typically cover Business Interruption losses following damage to the Insured’s property - or a nearby property – as a result of specific one-off and localised events such as fire, theft or storm. How the policy will respond to losses caused by the current Government restrictions will depend on both the precise terms and conditions of the policy and the differing rules that apply between areas of the UK.

We’ll work to consider any new claims promptly and fairly, and communicate our decisions as fast as possible. The extension of restrictions to further areas of the UK will impact some customers, who will make new claims for Business Interruption.

We understand that due to the restrictions placed on businesses at this time, many have moved to working from home.

Where your customers’ Policy does not already include this cover, the following is added:

The Policy is automatically extended to provide cover for Property (including electronic office equipment) temporarily removed from the Business Premises to the homes of Directors/Partners/Principals/Employees as a result of the restrictions imposed due to the COVID-19 pandemic.

This cover is provided up to a limit of:

• £1,500 any one item
• A maximum of £3,000 at any one Employee's home.

This extension is automatically provided for Property otherwise covered under the Policy and subject to the Policy Wording and Excess in the Policy. The total Sums Insured will be limited to those specified in the Policy Schedule.

Your customers’ Employers’ Liability Policy automatically provides coverage for home working activity. For many businesses this will represent a change to their normal operating procedures, and it’s therefore important to ensure that they continue to comply with relevant legislation such as the Health and Safety at Work etc. Act 1974. The Health and Safety Executive have published their latest information and advice on their webpage with regard to home working, and we request they follow this guidance.

Where your customers’ Public Liability policy doesn’t currently provide coverage for working from home, it’s automatically extended to do so for non-manual activities only.

As we resume site surveys where they can be done in a COVID-19 Secure manner, customer and employee safety remains our highest priority. We’re taking a number of additional control measures to keep our Loss Control Engineers safe and mitigate the risk of spreading Covid-19.

Where our Loss Control Engineers can support your customers and obtain sufficient underwriting information, surveys will be conducted remotely through video or telephone conference calls. To aid these discussions, your customer will be invited to provide information, example documentation and site photos / videos before or during the discussion.

Where a remote survey is completed, a follow-up site visit may be required when circumstances permit.

If a site visit is deemed necessary, this will only carried be out in agreement with your customer. Specific topics such as social distancing, nature of the visit, agenda and timings etc. will be outlined by email ahead of the visit and our Loss Control Engineer will avoid setting up visits that coincide with start / finish times and / or shift changes.

We’ll also request that your customer informs us of any Covid-19 related precautions they’ve implemented that apply during the visit.

You can find more information about the steps we’re taking in our customer guidance. Please share this with your customers.

As we resume inspections and site surveys where they can be done in a COVID-19 Secure manner, customer and employee safety remains our highest priority. The following guidance outlines the additional control measures we’re implementing to keep you, your customers and our employees safe. Please share this with your customers.

If your customer is unable to open for business under Government guidelines, we expect compliance with our policy conditions including COVID-19: Unoccupied Premises. We reserve the right to accept risk or amend our terms and conditions, but we’re committed to demonstrating flexibility where possible. If your customer is unable to meet such conditions due to COVID-19, please inform your usual Allianz contact as soon as possible.

If your customer requires support in these challenging times, please contact your usual Allianz representative to discuss what alternative support we may be able to provide. Under some circumstances an adjustment to the cover required may be available and / or we may be able to assist with deferred payments.

Following the closure of all Allianz offices, we’re taking the following approach for:

• New applications: we’re continuing to accept instalment applications from customers via our online application form. Please forward the following link to any clients wishing to use this facility www.allianz.co.uk/instalments. We will endeavour to process the application as soon as possible, but please bear with us if there is a slight delay.
• Enquiries: we’re now able to answer instalment related calls on 0330 102 1820 and we can now accept cheques, however there may be a delay in processing theses. Our preferred option at this time would be electronic payments. We’ll answer your call as quickly as possible but you may experience a slight delay and we apologise for any inconvenience this causes. You can also email your instalment enquiries to creditapplication@allianz.co.uk and we’ll respond as soon as possible.

If you still receive monthly paper statements and will be unable to obtain these in the current circumstances, please sign up to our online statement solution ARC.

Following the closure of all Allianz offices, our credit management teams remain operational on a working from home basis. Please contact your credit controller via their usual email address and they will respond to your enquiry as soon as possible.

We can now accept cheques, however there may be a delay in processing these. Our preferred option at this time would be electronic payments (BACS, CHAPS) to the following bank account:

Lloyds Bank City Office. Account Name: Allianz Insurance PLC Sort Code: 30-00-02 Account Number: 00292171

Please ensure that your account number is quoted as a reference.

COVID-19 will impact industry groups in different ways and for varying degrees of time. Some, such as food retailers, IT and telecommunications equipment suppliers, precision engineers, or logistics and warehousing operations, may see a marked uptick in activity, whereas others, for example theatres and similar leisure industries, luxury goods retailers, or hotels and restaurants may see a downturn.

During this period of volatility, your customers may find it difficult to accurately project their expected business activity for the ensuing period of insurance and may ask for guidance when it comes to considering their exposure information. Alongside the professional guidance you provide as their insurance broker, it remains your customers’ responsibility to fairly present their exposure to us, but we expect the information provided to be based on likely projections and business activity, not the best or worst case scenarios based on the current volatile trading environment.

The current economic position is volatile, but it’s important to remember that in many situations risk exposure remains even where operations are reduced or halted.

The ongoing pandemic is likely to be significantly impacting your customers who have construction sites. In the event that construction works have to cease on your customer’s site(s), the Contract Works section of their Allianz Construction Select policy will continue to cover loss or damage to work at closed construction site(s) for a period of up to a maximum of 90 days from the day on which work ceases. Where cessation continues (or is likely to continue) beyond 90 days, please contact us as far in advance as possible to discuss possible options for the continuance of cover.

To help assist your customers with the controlled closure of sites, our unattended construction site document sets out recommended measures to keep sites secure and safe, as well as useful links to further information. Please share this with your construction customers.

When setting deadline dates for new risk improvements, we will take a pragmatic approach and agree mutually acceptable timescales.

If current risk improvements, which have already been raised following a survey at the Premises, are unable to be completed as a result of the restrictions imposed due to the COVID-19 pandemic, we will review on a case-by-case basis taking into account the steps already taken to mitigate the risk and the circumstances surrounding the inability to complete the risk improvements.  

Customers who have legal expenses cover from Allianz also have access to our TALK Legal helpline which can provide advice on a wide variety of topics that may be relevant in the current circumstances. 

To help you and your customers find what they’re looking for more quickly, we’ve listed frequently asked questions relating to COVID-19.

If you can’t find what you’re looking for, policyholders can call our legal advice line on 0370 241 4140 about any legal matter. Lines are open 24 hours a day, 7 days a week.

We’re aware that many of your Commercial Motor customers will want to support people in their communities who are impacted by COVID-19, including the NHS Volunteer responder scheme. If your customer or one of their employees use their company vehicle for voluntary purposes (non-payment) to transport medicine or groceries to support others or for the activities of an NHS volunteer responder, subject to your customer’s permission and any existing conditions (such as driving restrictions), their cover will not be affected. You do not need to contact us to update documents or extend your customer’s cover. Cover will not be affected until the end of the COVID-19 restrictions or until 31 October 2020, whichever is sooner.

Our focus is to keep providing you with a normal service as far as possible and so, renewals will continue to be transacted via our usual process though we will look to engage you earlier than usual.

Given the current situation, we do appreciate that there may be disruption affecting the timely communication between us, you and your customer. If you or your customer are unable to effect the renewal in the normal way, we have no intention of leaving your customer without cover.

Please speak to your usual Allianz representative so we can work with you to find the best solution. If that is not possible we will assume that the policy will renew on the terms invited unless advised otherwise. We will continue to attempt contact with you to secure the relevant information prior to and for 28 days after the normal renewal date.

Allianz insurance property wordings do not typically extend to cover loss of income or profit from COVID-19-related incidences.

Allianz has already proactively contacted those brokers where we do provide some elements of cover and which may respond to COVID-19 incidences.  However, if you have not been contacted or if you have a specific query relating to a policy wording and coverage, please contact your local Allianz branch.

Allianz insurance motor and liability wordings will typically respond where legal liability has been accidentally incurred by the Insured.

Allianz Insurance business travel wordings will typically respond where travel restrictions have been imposed, or repatriation advice has been given by authorities such as the Foreign and Commonwealth Office.