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We have a client with the following clause on their B.I. policy


You are insured for business interruption resulting directly from:

1. property damage, or

2. an order by a lawful authority,

that results in closure of any transport route, port or airport anywhere in New Zealand. The deferment period is the first 24 hours

There was a major roadworks project on the roads around their premises for 14 weeks, including six weeks of road closure on two of the three roads going to the business. The third road was down to one lane, controlled by a stop/go person. Client can show very significant reduction in turnover for the period.

Insurer has declined claim, stating that the work plan for the roadworks included a slip lane that allowed access to the client premises, and as there was still access, the road isn©t closed, so there is no claim.

They have also stated that the main road was the one that wasn't closed, and that this is the transport route, not the other two roads that were closed.

We have pointed out this isn©t how the policy is worded. The wording states closure of any transport route, not all transport routes, and makes no reference to whether or not prospective customers can still access the site. Transport routes are not defined under the policy wording and using standard dictionary definitions, all roads are transport routes.

Insurer is adamant that there is no claim and hasn't addressed/responded to the points we raised.

What are your thoughts?

Reply:  Crossley Gates

As you say, the clause refers to business interruption resulting directly from closure of ANY transport route. It is not a prerequisite of cover that there is no access to the premises at all. So long as the downturn in trade corresponds with the closure, I would have thought the claim appears to be as strong one.

September 2020

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