Comment - Insurance sector must be reformed after year of shame
The government must include the actions of the insurance industry in its long-promised inquiry into the pandemic.
For this sector, which is first to paint itself as the saviour of people and businesses in trouble, has covered itself in shame.
This time last year, thousands of companies were forced to close without warning when the pandemic broke out.
Bosses who faced losing their firms expected help from insurers - based on faithfully and regularly paying for cover, in some cases for years.
It was a period of unprecedented national crisis, yet when the chips were down, some insurers stepped back - not up - and started quibbling and dragging their feet.
Desperate companies complained in droves, forcing the Financial Conduct Authority to launch a test case to provide legal clarity on wordings.
That went to the High Court in September and the judge found in favour of the FCA. Insurers then had the gall to appeal to the Supreme Court - and lost. But by then it was January, some 10 months after the outbreak.
Today, some are still giving their loyal customers the run around, demanding one document after another in a clearly calculated strategy designed to make already battered business people give up.
And, should they finally, grudgingly admit they are liable for ‘business interruption’ due to Covid, some start wrangling over the amount.
It should be a simple calculation based on turnover. But insurers have made that a tortuous and complicated process as well. And one they often win.
This is a massive breach of trust affecting many bosses at the lowest point in their lives. Firms they’ve spent years building up on the line, savings evaporating, homes up for sale and relationships breaking down under the stress.
We’ve long joked about how insurance companies like to wriggle out of claims. Writ large like this, it is plainly and outrageously wrong.
The entire approach to insurance and its broken business model needs to be scrutinised at the highest level of government and reformed.
So much time has passed that some business people now hope to receive a payment to start again. Although sadly it will be far too late for some.