Business Interruption Policy Wordings. Harry Roberts

      The initial report was not exhaustive and more complex issues needed some deeper study. So with the support of the Insurance Institute of London, an ambitious project to identify and comment upon the more complex issues was commenced. A cross-industry team was formed to progress this and thanks go to everyone who gave of their time so generously.

      This Report marks the culmination of three year’s work and addresses topics identified by the BI community and the CILA. We do not propose prescriptive new wordings. Nor do we want to throw the baby out with the bathwater. In fact, we believe that most of the existing BI wording works, most of the time. As a result, this publication highlights those areas where we think some clarification would help customers, insurers and adjusters and with contributors from across the industry we explore some fundamental procedural change where it is agreed it would be helpful to all.

      Throughout, the objective has remained unaltered – to avoid similar claims giving rise to different outcomes depending on a particular interpretation of a policy wording. Clarity and contract certainty, where consistency in the claims response can be seen, is what we have tried to achieve.

      While we have attempted to identify the issues that we believe would benefit from some level of change in as concise a manner as possible, we have tried to balance this with the need for a degree of discussion so that the need for clarity is clearly appreciated and justified.

      We are aware of several wording changes, some of which were underway within insurance companies irrespective of this initiative, which have drawn from this work. We hope that this Report will assist consideration of further change.

      This is not a finite undertaking. New circumstances and the changing face of the economy, both locally and globally, will demand an ongoing review process. New risks, which existing wordings may struggle to easily accommodate, will undoubtedly present themselves. This is something that has been clear over the last few years, and it is likely to continue. Even in the absence of significant new exposures, clarification is an ongoing process.

      This Report does not claim to be exhaustive; it does, however, aim to deal with the most commonly encountered difficulties. There are many issues that remain problematic, for specifc market sectors for example.

      In scoping this work, we have been mindful of the need to avoid being unduly prescriptive; we are not seeking to produce new wordings, but rather to identify issues benefiting from clarification, and have offered potential solutions as opposed to any specific recommendations. Contributors have been mindful of the need to avoid any anti-competiveness and we believe that this is a balanced and objective assessment of the issues we all face on a day-to-day basis.

      We hope this is a useful and thought provoking document that will influence policy wordings in the future. Whether we have succeeded will be objectively tested by answering one question – will BI wordings change as a result of this (or the earlier initial) Report?

      Damian Glynn

      Harry Roberts