On 6 May, the Auto­ri­té de contrôle pru­den­tiel et de réso­lu­tion (ACPR) – the French Super­vi­so­ry Autho­ri­ty – ini­tia­ted a the­ma­tic sur­vey on Busi­ness Inter­rup­tion cove­rage due to the pan­de­mic cri­sis and its conse­quences : “ACPR has deci­ded to draw up an inven­to­ry of the main contracts dis­tri­bu­ted on the French mar­ket as part of its pru­den­tial super­vi­sion and moni­to­ring of com­mer­cial prac­tices”, it said in a statement.

The French Super­vi­so­ry Autho­ri­ty for Insu­rance sur­veyed 21 autho­ri­sed insu­rance com­pa­nies in France, repre­sen­ting “a repre­sen­ta­tive sample of the bulk of the busi­ness inter­rup­tion cover”.

On May 23rd made public the fin­dings of its inves­ti­ga­tion into busi­ness inter­rup­tion gua­ran­tees : Busi­ness inter­rup­tion cove­rage is under­writ­ten in France by approxi­ma­te­ly one com­pa­ny out of two, of which one out of five has taken out busi­ness inter­rup­tion cove­rage without damage. In total, the busi­ness inter­rup­tion mar­ket repre­sents €354 mil­lion in pre­miums in 2019, out of a total of €5 bil­lion for pro­per­ty damage to pro­fes­sio­nals, i.e. near­ly 1.13 mil­lion policyholders.

Fur­ther­more, Covid-19 is, for 93.3% of poli­cy­hol­ders, not cove­red by their insu­rance poli­cy, either because they only cover busi­ness inter­rup­tion in the event of direct mate­rial damage (fire, water damage), or “more rare­ly” because insu­rance com­pa­nies have expli­cit­ly exclu­ded the pan­de­mic from their contracts.

On the other hand, 2.6% of poli­cy­hol­ders can claim an indem­ni­ty for Covid-19. This is par­ti­cu­lar­ly the case when the contract covers BI losses wha­te­ver the cause and does not include any exclu­sion of the pan­de­mic risk.


The ACPR also calls on insu­rers to be vigi­lant : “The pan­de­mic has shown that, des­pite the recom­men­da­tions made by the ACPR over the past four years, the qua­li­ty of insu­rers’ infor­ma­tion sys­tems is still too une­ven. Orga­ni­za­tions must ensure that they have a pre­cise vision of the content of the gua­ran­tees that their poli­cy­hol­ders bene­fit from, inclu­ding for older gene­ra­tions of contracts or when dis­tri­bu­tion is car­ried out by inter­me­dia­ries” stresses the supervisor.

The ACPR thus iden­ti­fied doubts about the appli­ca­tion of poli­cy gua­ran­tees for 4% of the poli­cy­hol­ders : “In this case, only a judge’s inter­pre­ta­tion would remove any uncer­tain­ty if the insu­rers concer­ned do not inter­pret the contract in favour of the insu­red”, it points out. ACPR the­re­fore invites insu­rers “to review the wor­ding of all ambi­guous contrac­tual clauses in the future and to cla­ri­fy the gene­ral archi­tec­ture of their poli­cies in order to clear­ly inform poli­cy­hol­ders of the exact scope of their coverage”.


This the­ma­tic sur­vey can be com­pa­red to a Finan­cial Conduct Autho­ri­ty (FCA) recent sta­te­ment – the Bri­tish Super­vi­so­ry Autho­ri­ty – accor­ding to Chris Woo­lard, inter­im CEO of the FCA, around 90 percent of BI poli­cies taken out by busi­nesses do not cover pan­de­mic risks.

Fur­ther­more, the FCA has taken a unique ini­tia­tive in Europe, as it intends to obtain court decla­ra­tions as part of a test case, aimed at resol­ving the contrac­tual uncer­tain­ty around the vali­di­ty of many BI claims. The Court will have to deter­mine what was the exact cause of the losses to busi­ness, and whe­ther they were sus­tai­ned direct­ly as a result of the inci­dence of Covid-19, or to wider condi­tions trig­ge­red by the pan­de­mic, inclu­ding lock­down, self-iso­la­tion and social distancing.

The result of the test case will be legal­ly bin­ding on the insu­rers that are par­ties to the test case in res­pect of the inter­pre­ta­tion of the repre­sen­ta­tive sample of poli­cy wor­dings consi­de­red by the court. In res­pect of non-par­ties, the result will form per­sua­sive gui­dance for the inter­pre­ta­tion of simi­lar poli­cy wor­dings and claims.

The FCA said today the court hea­ring would take place bet­ween 20 – 23 July and 27 – 30 July.