Insurers Ordered To Pay Small UK Firms Covid Losses

Insurers Ordered To Pay Small UK Firms Covid Losses. image: Pixabay

Insurers Ordered To Pay Small UK Firms Covid Losses.

Small firms are cheering a Supreme Court ruling that appears set to force insurers to pay out on disputed coronavirus business interruption claims potentially worth £1.2bn.
Judges were asked to set the parameters for valid claims from various policies following a test case brought by the Financial Conduct Authority (FCA) with the support of eight insurance companies last summer.

The legal process was fast-tracked to the highest court in England and Wales which said today, Friday, Jan. 15, that it was to have “substantially allowed” the appeal brought by the FCA and an action group to clarify the position. A broad range of firms including pubs, cafes, wedding planners and beauty parlours argued they faced ruin when they were turned down by insurers for business interruption policy claims on losses caused by the first national COVID-19 lockdown.

However, many insurers had refused to pay, arguing only the most specialist policies had cover for such unprecedented restrictions. It was agreed that a selection of policy wordings should be tested in court, setting the parameters for what would be considered a valid claim. The ruling provides guidance for a wider pool of 700 policies, potentially affecting 370,000 small businesses.

Axa Insurers Ordered to Compensate a Hotelier- Restaurateur For The First Time.

In December 2020, a court ordered Axa insurers to pay an amount of 60,000 euros to a hotelier-restaurateur in the resort of Les Gets, pending the final quantification of its operating losses. This marked an unprecedented landmark decision for an establishment of this type. The Annecy commercial court ordered the insurance company Axa to compensate a hotelier-restaurateur for its operating losses linked to the Covid-19 epidemic.

It all started in April 2020

Some of Britain’s biggest insurance companies faced legal action from small business owners who say their legitimate business interruption claims have been unfairly turned down. Following the forced closure of thousands of businesses across the UK, insurers across the board were quick to change their policy terms in an attempt to rule out claims arising from the Covid-19 pandemic.

Although several large insurers including Allianz, Aviva and Axa do not provide cover, some insurers, most notably Hiscox, sold policies before Covid-19 hit the headlines, stating they will pay out when a business was forced to shut owing to a notifiable disease.

Thank you for taking the time to read this news article “Insurers Ordered To Pay Small UK Firms Covid Losses”. For more UK daily news, Spanish daily news and Global news stories, visit the Euro Weekly News home page.


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Written by

Tony Winterburn

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