Insurers using 'every excuse' to wriggle out of Covid payouts South Yorkshire claims expert alleges
A South Yorkshire claims expert has slammed insurers for failing to make Covid payments to desperate firms.
Assessor Jeff Knibb said insurance companies were using ‘every excuse’ to wriggle out of business interruption claims.
Up to a third of firms were covered but most were put off by multiple hurdles - including insurers quoting wording that ‘was not even there’.
Mr Knibb, of My Litigation Friend, spoke out after a Supreme Court ruling in January established the principle of cover for losses due to the pandemic.
At the time, the Association of British Insurers said they expected members to pay ‘up to’ £2 billion for business interruption in 2020.
Many firms hoped it would be a lifeline at a time of national crisis.
But due to the complexities it is thought up to 90 per cent give up.
Mr Knibb said: “The whole system is designed to put them off, insurers will fight to their last breath not to pay out.
“Many businesses are still waiting to see if they are covered and if so to what level. Some have waited more than a year despite the test case and appeal.
“Insurers are full of arguments that the lay person won’t have the knowledge to argue.”
Hurdles included denying a policy offered cover, arguments over the size of loss, caps and indemnity periods, and the meaning of words such as ‘incident’, ‘vicinity’, ‘ costs’, and ‘savings’.
Not only were insurers keen to limit their losses they were also afraid to pay out in case it established a precedent, said Mr Knibb.
His company does not charge for a ‘first look’ at a claim, he added. Average payouts to successful firms were £27,000, with him taking up to 20 per cent on a ‘no win no fee’ basis, he added.
A spokeswoman for the Association of British Insurers said insurers were ‘committed to settling valid claims as quickly as possible’.
In January, the Supreme Court substantially ruled in favour of the Financial Conduct Authority in a test case for coronavirus-related disruption.
The judgment ended legal arguments under 14 types of policy issued by six insurers, and a substantial number of similar policies in the wider market.
The FCA estimated the case would be worth £1.2 billion and affect 370,000 businesses.