Supreme Court backs small firms over business interruption insurance claims

Small business affected by enforced closures will welcome today’s announcement from the Supreme Court supporting their business interruption claims.

It should be noted that this ruling does not automatically mean every business has a legitimate claim against any insurer.

There are an estimated 370,000 businesses that has thus far been affected by the Pandemic, mainly those in the leisure and hospitality sectors.

Industry insiders estimate that the impact of these claims could exceed £1.2b to the industry.

There will be growing pressure on insurers to speed-up the settlement process now that the ruling has been passed and whilst the appeal process involved only a small panel of insurers; Arch, MS Amlin, Argenta, Hiscox, RSA and QBE, these were selected because they have policy wordings that are mostly representative of many more insurers.

As a consequence this action has the potential to apply to many more policyholders with insurers not involved in the verdict.

The ruling represents a significant victory for policyholders however, not all policies contested under the original action will pay out. And those expecting their claim to pay out are unlikely to receive it immediately.

The ruling contains hundreds of pages of legal analysis and the FCA has now extended a deadline for its consultation on proving the presence of COVID-19 in a certain area to the 22nd January 2021.

Our recommendation to any policyholder is to make sure that your claim is logged with your insurer and to begin the process of gathering documentation to evidence your claim.

Consider appointing your own loss adjuster to help with the process, whilst this does come at a cost it would be prudent for those larger claims to have some professional help and support.

Finally don’t be surprised if your insurer applies a deductible to any claim equivalent to government grants received, insurance is a contract of indemnity and no policyholder should benefit from “betterment”.

For more help and advice, please feel free to contact our commercial department on 01992 471 001 or email Hoddesdon@ashbourneinsurance.co.uk