COVID-19: Claims where the insured business is dissolved as a consequence of the Pandemic

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COVID-19: Claims where the insured business is dissolved as a consequence of the Pandemic

Published 2 julio 2020

The economic impact of the lockdown from March 2020 is expected to see a number of businesses become insolvent and thereafter be dissolved.  Where employees of a business are made redundant, the proportion of accidents in which they are involved which give rise to personal injury claims often increases, as some of the employees face financial pressures and others no longer feel ties of loyalty to their former employer.

The implementation of the Third Party (Rights Against Insurers) Act 2010 enables Claimants, whose personal injury claim would be against a dissolved or bankrupt Insured, to pursue the Insurer on risk at the time of the accident as the named Defendant in proceedings.  Either the accident, or the dissolution of the business, must have occurred after 1 August 2016.

Where businesses fail as a consequence of the COVID-19 Pandemic, insurers should seek to ensure that they obtain evidence and documents in relation to all accidents and injuries which may be the subject of claims.  Insurers should be alive to the ability of Claimants to present proceedings naming the Insurer as Defendant, and, where policy coverage questions indicate that indemnity would not have been provided to the Insured, should ensure that those arguments are raised in the claim.

Key Contacts

David Williams

David Williams

Leeds

+44 (0)113 251 4844

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