Potential Insurance Pay Owed To Small Businesses

Tens of thousands of small businesses could receive insurance payouts covering losses from the first national lockdown, following a court ruling. For some businesses it could provide a much-needed lifeline after the third lockdown, allowing them to trade beyond the pandemic crisis. The judgment should be a massive boost to all businesses reeling from a third lockdown who can now demand their claims are paid.

Hundreds of thousands of businesses that were forced to close, or faced significant losses, made claims on their business interruption insurance. But leading insurers disputed these claims, arguing their policies did not cover the restrictions that the virus had caused. This prompted a watchdog to bring a test case on behalf of policy-holders seeking legal clarity on the issue, leading to High Court and Appeal Court judges ruling in favour of the policyholders.

The insurance industry is expected to pay out over £1.8bn in coronavirus claims, related to the first lockdown, which includes business interruption policies. Customers who have made claims that are affected by the test case will be contacted by their insurer to discuss what the judgment means for their claim. All valid claims will be settled as soon as possible, and in many cases the process of settling claims has begun.

The Financial Conduct Authority (FCA), who brought the test case to court, stated, “We will be working with insurers to ensure that they now move quickly to pay claims that the judgment says should be paid, making interim payments wherever possible.”

The only advice being given to businesses at this time is that if your feel this court ruling has an impact on your business, then to contact your insurance provider. It has not yet been said if payments will be paid out as a lump sum or over a period of time.

Should you need any assistance with this, please contact us on 02085300720 or email businessdevelopment@nordens.co.uk