Sheffield bosses urged to chase insurers over pandemic payments
Sheffield bosses are being urged to contact insurers over ‘business interruption’ payouts due to the pandemic after a landmark legal ruling.
Firms should check their documents and chase insurance companies if they believe they have a claim, the Financial Conduct Authority has said.
Earlier this month the Supreme Court substantially ruled in favour of the FCA in an appeal over coronavirus-related disruption.
The landmark case is estimated to be worth £1.2 billion and could affect around 370,000 businesses.
Payments could throw a lifeline to firms in the locked-down hospitality sector, some of which have been closed for months.
But insurers will only pay out to companies that lodge a claim.
In Sheffield, Maurice Champeau, general manager of Crookes Social Club, said he was insured for up to £400,000 in lost earnings and a payout could be crucial to the survival of the business.
He said: “I spoke to my broker and they said said there is slightly different wording to the policy that was tested in the Supreme Court, but their assumption is that the insurers will have to pay.”
Sheldon Mills executive director of the Financial Conduct Authority, has written to insurers stating: ‘We expect you to be clear on your next steps as you write to all your policyholders with affected claims or complaints over the coming week’.
In his letter, Mr Mills warns that most SME policies only cover property damage, so are unlikely to pay out in relation to the pandemic.
But in some cases previously rejected claims were now valid, or the value of claims will have changed.
He adds: ‘We believe the Court judgments give all insurers the clarity they need to now conclude their claims processes with the large majority of their BI customers. We encourage all insurers to do so as quickly as possible’.
Huw Evans, director general of the Association of British Insurers, said they regretted any disputes and all valid claims would be settled as soon as possible.
He added: ‘We recognise this has been a particularly difficult time for many small businesses and naturally regret the Covid-19 restrictions have led to disputes with some customers’.