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Update – Jersey Business Interruption Insurance, COVID-19 Claims

Published: 27 July 2021

In January this year, Viberts published an article that considered what impact the landmark case of CA v Arch Insurance (UK) Ltd and Others [2020] EWHC 2448 (the ‘Test Case’) may have on Jersey businesses seeking to recover financial losses caused by COVID-19 (the ‘Virus’) under business interruption (‘BI’) insurance . For a recap on that article, please click here.

What has happened since the Test Case?

Following the Test Case, the UK Financial Conduct Authority (the “FCA”) encouraged insurers to reassess BI claims and pay out those that are valid without delay. The FCA also published a list of specific insurance policies that are, in principle, capable of being activated because of the Virus. The list covers over 200,000 policyholders in the UK and can be found here (Business interruption insurance test case: List of policies capable of responding to Covid-19 (fca.org.uk).

The Channel Island Financial Ombudsman (the ‘CIFO’) has reported that BI claims in the Channel Islands will be resolved with reference to the Test Case and published guidelines to assist Jersey businesses in making BI claims, which can be found here (210201-Business-Interruption-Insurance-published.pdf (ci-fo.org). Notably, the CIFO can only consider complaints from individuals or businesses with an annual turnover of less than €2 million and fewer than 10 full-time equivalent employees. Also, if a business is located in Jersey, but the insurer is based in the UK, the CIFO states that it may be more appropriate to refer complaints to the UK Financial Ombudsman, meaning the FCA’s list of policies above may also be relevant to businesses in Jersey.

Are insurers paying out now?

As of July 2021, insurers in the UK had accepted 40,531 BI claims and were considering the validity of a further 6,900 BI claims. According to the latest FCA data, insurers have paid out over £875 million in respect of BI claims since the conclusion of the Test Case. Whilst no comparable data for BI claims in the Channel Islands has been published, the CIFO is expecting BI claims to rise significantly in the second half of 2021.

What should Jersey Businesses do?

If businesses have submitted a formal complaint to their insurer but are dissatisfied with the response, next steps will depend on the size of the business.

Jersey businesses that are eligible to submit a complaint to the CIFO (Jersey businesses with less than a €2 million annual  turnover and less than 10 full-time equivalent employees) should consider this option, bearing in mind that the CIFO can make binding awards of up to £150,000. The CIFO reported that it has secured additional resources to help manage the expected influx of Jersey BI claims. This should help the CIFO resolve BI complaints expediently.

Jersey businesses that do not fall into the above category and have an annual turnover of less than £6.5million (but more than €2million); and, a balance sheet total of less than £5million OR less than 50 employees may wish to consider referring their complaint to the UK Financial Ombudsman if their insurer is based in the UK .


Policyholders in Jersey with potentially valid BI claims should take steps to preserve their position by keeping accurate records of financial losses caused by the Virus together with any supporting documentary evidence. BI claims should then be submitted as soon as possible to avoid being time-barred.

Viberts can assist Jersey businesses to understand the merits of BI insurance claims and advise on the most appropriate way of obtaining fair compensation. Viberts can also manage the claims process on behalf of Jersey businesses by liaising with the CIFO or UK Financial Ombudsman and/or commencing litigation where appropriate. Should you require any assistance please contact Litigation2@viberts.com or call 01534 888666.

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