Insurers drag heels on business interruption claims
6th April 2021
Do you have an outstanding insurance claim for business interruption since the first lockdown? Delays or refusal to pay seems to be an epidemic among insurers, despite the Financial Conduct Authority taking the unusual step of starting legal proceedings with 370,000 business claims against a number of insurers. Some claims have been paid, either partally or in full, but only after the Supreme Court issued a judgment against the insurers on 15 January.
Many claims are from small and medium-sized businesses like those on the Masterlord Office Village, who were confident that their business interruption policy would cover them when the pandemic hit and they had to close their doors. But a year later, most of them are still waiting for their money. Many insurance policies didn’t exclude events like pandemics from their cover, and others explicitly covered any losses as a result of someone “falling ill with a disease notified to the authorities within 25 miles of their business”. The pandemic is covered, the Supreme Court decided, but the insurers – including big guns like Hiscox – don’t agree. They have even accepted claims but set the value at £0.
More legal cases are pending to challenge the insurers, including Hiscox and Amlin, who are dragging their heels on settling claims. FCA data shows that, so far, 10,000 policyholders have received some money, with insurers paying out more than £470m. But more than 50,000 are still waiting. There’s even a Hiscox Action Group to pressure the company to pay out..
Businesses pay insurance premiums in the expectation that, when they have to make a claim, it will be paid. Sadly, this doesn’t seem to be the case with the pandemic.