COVID-19: Supreme Court backs small firms over business interruption insurance claims

Smallfirms are cheering a Supreme Court ruling that appears set to force insurers to disburse on disputed coronavirus business interruption claims worth a minimum of £1.2bn.

Judges were asked to line the parameters for valid claims from various policies following a test suit brought by the Financial Conduct Authority (FCA) with the support of eight insurance companies last summer.

The supreme court judgment, handed down in September, was widely seen as supportive for the majority of the estimated 370,000 companies said to be suffering from the dispute.

A broad range of firms including pubs, cafes, wedding planners and wonder parlours argued they faced ruin once they were turned down by insurers for business interruption policy claims on losses caused by the first national COVID-19 lockdown.

Six of the world's largest commercial insurers Hiscox, RSA, QBE, Argenta, Arch and MS Amlin, told the Supreme Court in an appeal that many business interruption policies did not cover widespread disruption.

The legal process was fast-tracked to the highest court in England and Wales which rejected the insurers' arguments and said it had "substantially allowed" an appeal brought by the FCA and action group to clarify the position.

A key part of the case related to "prevention of access clauses" - which are triggered by "public authority intervention preventing access to, or use of, the business premises".

Source: News Sky

COVID-19 Supreme Court small firms