In a big win for small UK businesses, The Supreme Court has ruled that ‘business interruption’ insurance policies will cover the losses resulting from the COVID-19 lockdown measures.
Many businesses rejoiced at the lifeline they were given on Friday (29th January), after the Supreme Court unanimously dismissed insurers’ appeals against honouring claims for COVID-19 losses. For many, insurance pay-outs will provide vital extra time for business recovery and the opportunity to continue trading.
What was the case?
Following the lockdown last spring, many business owners made claims through business interruption insurance for loss of earnings due to the pandemic. Many insurers refused to pay, which resulted in a case being made against insurers to review policy wordings and re-evaluate the parameters for a valid claim.
The case was carried out by the UK’s Financial Conduct Authority on behalf of 370,000 affected policy holders, with up to 700 insurance policies by 60 different insurers affected by the verdict.
The Supreme Court ruled largely in favour of thousands of policy claims.
This could mean businesses with successful claims could be owed tens of thousands of pounds. The Association of British Insurers reported £900 million in business interruption claims during the first lockdown.
A huge win for small businesses
Customers who have claimed will be contacted by their insurer to discuss what the judgement means for them. If a claim is valid it will be settled as soon as possible, although businesses may still have to fight over the cause of losses and the amounts owed.
The case has resulted in the removal of significant precedents surrounding business interruption claims. Insurance companies will need to review a huge volume of policies to assess their potential liabilities which could change the future of policy claims.
At Modus, we care about your business and want to offer support to help you continue to thrive even through lockdown. You can book a free support session with our team to discuss how we can best support your business and assess your strategy for 2021 here.
We’ve seen the effects of COVID-19 on businesses first-hand and understand that support in these uncertain times is more important than ever. By taking the time to learn about the businesses and people we are working with, we are able to ensure our clients are fully supported, and we touch base regularly to see if there is anything else they may need a helping hand with.