So, it has been another difficult and, in many ways, very strange year again, but from an insurance viewpoint it has been very different from the pandemic years.

Back then the insurance industry got a really bad (largely self-inflicted) press with the lack of covid business interruption cover, but so far this year we have had a ‘freeride’. No one has yet approached me as to why they are not insured for the damage to their business from the hikes in fuel and energy costs due to world events.

It is interesting that there is no expectation of insurance cover for the difficulties caused by Russia invading Ukraine whereas there was for a worldwide pandemic involving a previously unknown virus. There is of course a difference in that may business policies included cover for infectious diseases but as I have written here on a number of occasions, insurers never intended to provide cover for regional, let alone national or international lockdowns.

That said, some big business did have the foresight (and funds) to buy ‘proper’ pandemic insurance, the Wimbledon Tennis Championship being the high-profile example, in the same way that big business has been able to ‘hedge’ against the worse extremes of the energy crisis, but the policies for smaller business that were forced to pay covid business interruption claims by the courts only did so because of poorly drafted policy wordings.

Policies for smaller business were only ever designed for localised outbreaks of diseases like TB (Tuberculosis) affecting a small area and insurers provided this cover on the expectation of Government and the authorities following conventional wisdom (and their own pandemic planning) of isolating the infected, not locking down the uninfected.

It didn’t help that much of the media dialled in to the ‘nasty insurers never pay’ perception of many but the insurance industry could have managed expectation much better when covid first hit rather than sending out the ‘London lot’ used to dealing with big business who didn’t really understand the position with smaller business, even though it is the vast majority of businesses in the UK.

Nonetheless most clients we spoke to realised covid was too big for insurance and for the few that didn’t then, perhaps the UK Covid bill, currently estimated between £300/400 billion, may have made them rethink.

But expectation of what should or shouldn’t be covered by insurance does seem strange at times. It is somewhat odd that a motorist wouldn’t expect a conventional motor insurer to pay for a breakdown (even AA type breakdown cover has limits for parts), but many homeowners do expect their insurer to pay for a replacement roof, even if it is well past its sell-by date and the ‘damage’ is obviously due to wear and tear.

We do seem to be a funny lot.

Thanks for reading and enjoy your Christmas.