What are the implications for AXA policyholders?

In the event you believe you have a valid claim you wish to submit for COVID-19 Business Interruption, please forward the following information to Spclaims.INS@axa-insurance.co.uk:

  • Policy number
  • Insured name
  • Risk address including postcode
  • Contact details
  • Date loss occurred / commenced
  • Period business has been affected
  • Monthly loss of income / revenue

The Supreme Court judgment will affect the outcome of your claim if:

  • the specific wording of your policy was reviewed as part of the test case, or
  • there were points being considered by the test case that are relevant to your policy wording.

A number of types of policies / clauses were not considered by the Court as part of the ‘test case’, which include, without limitation:

  • Policies which only provide business interruption cover where the policyholder has suffered damage to its property.
  • Clauses which provide cover if there is a specific disease as set out in an exhaustive list of diseases which does not include coronavirus.
  • Clauses which provide cover if there is notifiable disease or some other categorisation of disease, but which require the disease to be present on the insured premises.

FCA COVID-19 calculator

The FCA has published a calculator to help policyholders who have the policy requirements to prove the presence of COVID-19 in their policy area at the time of the business interruption. The results can be used to help you make a claim under your policy. This calculator supports the content within the FCA Finalised Guidance, specifically Chapters 7, 8 and 9.

Further information about the calculator can be found on the FCA Help and Support page. You can read all their updates and find further information on their dedicated business interruption page.

What have you told policyholders who might be affected by this?

We have previously written to all our policyholders with claims or complaints for business interruption losses related to COVID-19 under relevant non-damage business interruption policies and advised whether or not you are potentially affected by the test case.

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Letter 1

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Issued to customers whose policies contain:

  • No Non Damage Denial of Access (NDDOA) and disease within a 25 mile vicinity
  • Specified diseases only but with NDDOA
  • No cover due to the Trends clause
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Letter 2

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Issued to customers whose policies contain or have been endorsed to include:

  • Specified disease cover only and with no Non Damage Denial of Access (NDDOA)
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Letter 3

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Issued to customers whose policy contains:

  • Unlisted disease cover at the Premises (manifesting at the Premises)

In July following the end of the test case hearing, we wrote to policyholders who could be impacted with the following letter:

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July letter

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Following the FCA’s publication of the judgement on 15 September, we wrote to policyholders who could be impacted:

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September letter

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We have now worked through the Supreme Court’s judgement and are reassessing those affected claims/complaints where relevant.

Please note that policies that provide cover for specified listed diseases only are not affected by this judgement. As coronavirus / COVID-19 is not a listed disease, there is no cover provided under these policies.

While we are not yet in a position to provide a final decision on each claim, we commit to doing so as soon as possible and we will write to our customers again at that time.

Why isn’t your policy potentially affected by the test case?

The test case is not intended to encompass all possible claims under non-damage business interruption policies and claims. Where we do not consider that your policy is potentially affected by the test case we have written and told you why.

What if your claim has already been declined or you have made a complaint?

If your claim has been declined, or you have made a complaint and received a final decision letter, then the decision you have been given remains our final decision at the current time. However, now the test case has reached final resolution we will consider whether our decision needs to be revised.

We will write to you again at that time. You do not need to take any further action.

If you have made a complaint but not received a final decision letter and our view was that your claim is one where the outcome may be potentially affected by the test case, then we postponed our decision on your complaint pending the outcome of the test case. This means that we did not send you a final response within eight weeks as indicated in our Complaints Process document.

If after our review of the judgement, we conclude that your claim is now covered, your claim will be progressed by our claims team and the complaints team will review your complaint once your claim has been progressed.

If part of your complaint is not covered by the test case, we will continue to deal with that part of your complaint and we will contact you separately about it.

What if you have a claim in progress or you have not made a claim?

We will continue to consider all claims made and give you our view on how your policy responds, including those relating to policies that are potentially affected by the test case.

Now that there is final resolution of the test case, we will re-visit our claims decisions to ensure that they are not impacted by the ruling of the Court. We will write to you again at that time to confirm whether or not we consider that the position of your claim has changed. You do not need to take any further action.

In the event you believe you have a valid claim you wish to submit for COVID-19 Business Interruption, please forward the following information to Spclaims.INS@axa-insurance.co.uk:

  • Policy number
  • Insured name
  • Risk address including postcode
  • Contact details
  • Date loss occurred / commenced
  • Period business has been affected
  • Monthly loss of income / revenue

Once we have registered your claim we will respond to confirm the policy cover position and the next steps.

History of the FCA test case

In May 2020 the Financial Conduct Authority (FCA) announced their intention to obtain a court declaration, as part of a ‘test case’, to resolve causation issues and contractual uncertainty around the validity of many non-damage business interruption claims made due to the coronavirus pandemic (COVID-19).

The ‘test case’ considered a representative sample of non-damage business interruption policy wordings to determine the interpretation of certain clauses within those policies and whether they provide cover for COVID-19.

AXA was not one of the Insurers that was a defendant in the ‘test case’, although the outcome is now providing us with guidance as to interpretation of similar policy wordings.

The timetable of proceedings

Following a court order on 16 June 2020, the test case proceeded on the following timetable:

Timetable of proceedings in the FCA ‘test case’ for business interuption during the during the COVID-19 crisis
Date(s) Action
9 June 2020 FCA started claims in the High Court
20 - 23 July and 27 - 30 July 2020 8 day court hearing before Lord Justice Flaux and Mr Justice Butcher
15 September 2020 The High Court published its judgment

There was then an escalated appeal process, where a number of named parties of the ‘test case’ submitted appeals
16 - 19 November 2020 Supreme Court appeal before Lords Reed, Hodge, Briggs, Hamblen and Leggatt
15 January 2021 The Supreme Court handed down its appeal judgement

As the Supreme Court is the highest court in England and Wales, this decision represents a final resolution to the ‘test case’ and it cannot be appealed further.

Where can I find out more and what the Regulator is saying?

The Financial Ombudsman Service has provided information on complaints related to business interruption cases on its website.

Your FOS rights are not affected by the ‘test case’. If the normal complaint process is exhausted you can still refer it to the FOS.

For more information about the ‘test case’ or to subscribe to email updates, please visit the FCA’s website.