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The Supreme Court judgment in the FCA test case is highly favourable to policyholders. One aspect it has clarified is that where the claim is based on an occurrence of COVID-19 within a specified radius, it is enough for the insured to prove that there was at least one such occurrence in the area.
In December the FCA published guidance on securing the necessary proof, and we summarise that below.
The most effective proof is a known case within the specified area. This need not necessarily be a case treated by a GP or a hospital, but can include self-isolation following symptomatic presentation, as long as evidence is available.
In major cities and other conurbations the occurrence of the disease is self-evident, and no enquiry should be necessary.
The quickest and easiest source of information, readily available, is your local NHS hospital trust. Most businesses will have a major hospital within 25 miles, and trusts publish their own records in the public domain.
Also, most local authorities maintain records of COVID-19 within their areas. If the insured radius is 25 miles, generic information from the LA should suffice. If the insured risk’s 25-mile radius covers more than one LA, it may be necessary to interrogate more than one. In some instances – sparsely inhabited regions of the UK – refinement of the search by postcode should be possible.
All these methods suit policyholders with a 25-mile cover. Where the policy specifies a one-mile limit, and none of the above is readily helpful, resource to statistical method is possible. We expect the number of cases with this limitation that can’t be resolved from readily available information to be very small. Given that, currently, about three and a quarter million cases have been recorded in the UK, or one in twenty of the population, it’s a reasonable inference that there has been an incident within the radius. This, however, is not a method dealt with by the Supreme Court, and could still be subject to resistance from insurers.
The statistical methods approved by the courts are to be found in draft guidance from the FCA, which can be found by following this link.
In the meantime, we are happy to help with any problems.