Covid business interruption insurance claims valid, rules Supreme Court

Covid business interruption insurance claims valid, rules Supreme Court

A landmark court judgment this month ruled that tens of thousands of businesses who were previously refused Covid-19 insurance payouts should now receive the money. According to reports, around 370,000 policyholders could be affected and £1.8bn may eventually end up being repaid by insurers. 

Harper James Solicitors’ team of experts are currently supporting clients through the process of making business interruption insurance claims which, for many, could provide lifeline funding to get them through the latest lockdown. 

Simon Smith, a dispute resolution solicitor for Harper James Solicitors, said: 'This ruling could be very good news for many Covid-hit businesses who were told last year they were not eligible for an insurance payment, having applied under the terms of their business interruption policy to their insurers.'

Four steps to progress your business interruption insurance claim

  1. Check the wording of your policy and have it clear in your mind when you call your insurer.
  2. Cross-reference it with the wording of the Supreme Court judgement, a summary of which is available on the FCA website.
  3. Gather any evidence required showing how Covid-19 impacted your business (you may need to prove the presence of Covid-19 in certain types of policy).
  4. Gather evidence for the losses you are seeking to recover.

From March last year, many businesses were left high and dry when insurance companies refused to pay out on their business interruption policies. Small business owners, many paying thousands of pounds per year for many years for policies, discovered that when they most needed this payout, to cover the interruption of Covid-19 lockdown, it wasn't there for them.

The Financial Conduct Authority brought a test case to the High Court last year after thousands of businesses complained. It asked High Court judges to rule on whether the wording in a selection of common insurance policies meant that they should cover losses caused by coronavirus restrictions. The case was fast-tracked to the Supreme Court which decided that in most cases, insurers should pay out. Judges also provided guidance that could apply to another 700 insurance policies, potentially affecting as many as 370,000 small businesses. 

A key issue was whether so-called disease clauses in the policies mean that insurers should pay out to cover losses caused by businesses being ordered to shut under coronavirus restrictions. The Supreme Court ruled that Arch, Argenta, Ecclesiastical, MS Amlin, Hiscox, QBE, RSA and Zurich should honour claims made by small and medium-sized businesses to cover the losses they suffered during the first lockdown. 

Do you have a business interruption insurance claim you are looking for expert advice on from experienced solicitors? Read our guide to Covid-19 and business interruption insurance claims to find out more about our specialist assessment service.

About the Author

Simon Smith

Simon Smith

Senior Dispute Resolution Solicitor
Simon is a very experienced dispute resolution solicitor, he qualified in 1996 and has worked in private litigation practice for over 25 years. He is used to analysing large amounts of complex information quickly to make well reasoned, practical and commercial decisions. Simon is very hands on and prides himself on being user friendly. He has dealt with a wide range of commercial, civil and property cases ranging from high value contract and company/partnership disputes to neighbour disputes and arguments over wills and estates.


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