Insurance Payouts: Supreme Court rules in favour of SMEs

Insurance companies that initially rejected claims from business for losses due to the coronavirus pandemic have been overruled by The Supreme Court, you may be entitled to a payout.

The Supreme Court has backed the Financial Conduct Authority (FCA) appeal on behalf of policyholders. Thousands of policyholders will now have their claims for coronavirus-related business interruption losses paid by their insurance companies. 

Sheldon Mills, Executive Director, Consumers and Competition at the FCA, commented:

“Coronavirus is causing substantial loss and distress to businesses and many are under immense financial strain to stay afloat. This test case involved complex legal issues. Our aim throughout this test case has been to get clarity for as wide a range of parties as possible, as quickly as possible, and today’s judgment decisively removes many of the roadblocks to claims by policyholders.

“We will be working with insurers to ensure that they now move quickly to pay claims that the judgment says should be paid, making interim payments wherever possible. Insurers should also communicate directly and quickly with policyholders who have made claims affected by the judgment to explain next steps.

“As we have recognised from the start of this case, tens of thousands of small firms and potentially hundreds of thousands of jobs are relying on this. We are grateful to the Supreme Court for delivering the judgment quickly. The speed with which it was reached reflects well on all parties.”

Each policy needs to be considered against the detailed judgment to work out what it means for that policy. 

  • Policyholders with affected claims can expect to hear from their insurer soon
  • Policyholders with questions should approach their broker, other advisers or insurer
  • Policyholders who remain unhappy following their insurer’s assessment of their claim may be able to refer their claim to the Financial Ombudsman Service, whose role is to resolve individual disputes

We would encourage all Brixton businesses to check with their insurer as you may be entitled to an insurance payout that was denied earlier in the pandemic.

Source: FCA

More information is available here.

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