Supreme Court backs business interruption insurance claims
Policyholders with business interruption insurance facing disputed claims could now be seeing their insurer pay up following a Supreme Court ruling.
This is as a result of a test case which was brought by the Financial Conduct Authority (FCA) with eight insurance companies.
Why was the case brought to court?
During the first lockdown in 2020, many small businesses were affected as firms were told to shut up shop due to COVID-19 restrictions and at that time it was for an unforeseeable period. These firms, many in the hospitality and service industry such as pubs, restaurants, cafes, and health and beauty, looked to their business interruption insurance policy due to the disruption that COVID-19 was having on their business.
Many claims were turned down by their insurer, leaving many businesses facing financial ruin.
Insurers cited that only specialist policies would cover this and that business interruption policies did not usually cover widespread distribution.
The policy wording was then tested in court so that parameters of a valid claim were able to be set.
The Supreme Court ruling has provided guidance for around 700 policies which is estimated at backing around 370,000 small businesses.
Affected policyholders should check with their insurance broker to see if they are able to claim.
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