Dear Members,

The Mutual has been following the FCA Business Interruption Test Case closely to assess the decisions made by the Courts and how they impact our Business Interruption cover.

On 15 January 2021, the Supreme Court handed down its Judgment. The full Judgment is available to view at on the Supreme Court’s website.

The Supreme Court largely confirms the outcome of the High Court’s ruling that, except in rare circumstances, cover is limited to those Members who were required to close as per the Governments lockdown guidelines. However, the ruling does provide further clarity on whether cover should apply for those businesses that may have been forced to partially close as a result of Government restrictions during the pandemic.

For example, if a restaurant had had dine-in customers and a takeaway service and continued to run as a takeaway, the business may have a claim for loss of income on the dine-in part of the business.

Therefore, I can confirm that for this new scenario the Mutual will consider a claim for reduced gross profit.

Before submitting your claim, please review the statements below to ensure these apply to your situation. If the following statements do not apply to you, unfortunately, you will be unable to make a claim.

What does the Mutual give cover for?

The Mutual’s Business Interruption cover for the effects of Covid-19 on a Member’s business is for loss of profit because:

• the Government said the premises must be closed or partially closed, or
• there is another reason why the Covid-19 pandemic meant that the Member could not access the premises (for example, the Member’s shop was in a hospital and the hospital authorities told the Member to close the shop), or
• the effect of the Government statements or regulations was that part of the business could no longer operate, or
• someone working at, or visiting the premises had Covid-19, or
• the virus that causes Covid-19 was found at the premises.

In each case, you must have clear evidence that your business has been interrupted or interfered with.  For example, no cover exists if people ‘self-isolated’ at home and/or the premises were ‘deep cleaned’, but the business was able to continue trading with no discernible impact on profits.

Please note that this cover only applies to:

• Members who renewed their cover with the Mutual on or before 9 June 2020
• new Members who joined the Mutual on or before 27 April 2020.

Can I make a claim?

If you can answer yes to any of the following questions, you may wish to consider making a claim:

Did you have to close or partially close your premises or stop running part of your business because

• the Government said you must, or
• there was another reason why the Covid-19 pandemic meant that you could not access the premises?

Has someone visited your premises whilst infected with Covid-19, and:

• in Scotland, was that on or after 22 February 2020?
• in Northern Ireland, was that on or after 29 February 2020?
• in England or Wales, was that on after 5 March 2020?

Has the virus which causes Covid-19 been found at your premises, and:

• in Scotland, was that on or after 22 February 2020?
• in Northern Ireland, was that on or after 29 February 2020?
• in England or Wales, was that on after 5 March 2020?

How much can I claim for?

There is a limit shown on your Schedule on how much the Mutual may pay if your claim is agreed.

Is there cover if my premises were closed but my business carried on?

Even if you had to close your premises there may not be cover. For example, if you continued to run an existing takeaway or on-line business, your business may not have been “interrupted” or “interfered with”.

If you had to close your premises but your business was able to operate somewhere else, there may be cover.

If you changed your business to survive and your profit reduced, you may have a claim.

Can I claim if I decided to close when I didn’t have to?

If your business was allowed to stay open, but you decided to close (even if it was to protect yourself, your staff, your family and your customers) you will not be able to claim. Cover only applies if the Government said you must close your premises.

Can I make a claim if I had fewer customers?

Unfortunately, there is no cover for reduced profits if you had fewer customers, or if you decided to close because you had fewer customers.  The cover only applies if you could not access your premises because, for example, the Government said you must close your premises.

How can I make a claim?

If you feel you may have a claim under the business interruption cover, please click here for the claim form. You can complete the form online, or you can email or post the completed form to us.

You will need to provide certain information and documents to support your claim. Full details of what is required can be found in the claim form.

The Mutual will look carefully at the facts of each claim in deciding whether the claim falls within the cover and how much it may agree to pay.  We may have to ask you for more information and documents to support your claim.

If you have any queries about your cover or if you need any help completing the claim form, please email us at [email protected].

Yours sincerely

Peter Wagg
Chairman, The Retail Mutual