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Supreme Court backs small businesses COVID insurance claims

Supreme Court backs small businesses COVID insurance claims

In a test case brought by the Financial Conduct Authority, the Supreme Court has ruled in favour of small businesses initially denied payouts on their business interruption insurance policies following the first wave of coronavirus restrictions.

For some businesses it could provide a lifeline, allowing them to trade beyond the coronavirus crisis.

During the first national lockdown, hundreds of thousands of businesses were forced to close, resulting in significant losses to their income. However, when they claimed on their business interruption insurance a number of leading insurers disputed the claims, arguing their policies did not cover the restrictions.

While the majority of small business commercial insurance policies focus on property damage and contain only basic business interruption cover, some also cover interruption from other causes, in particular infectious or ‘notifiable’ diseases and public authority closures or restrictions.

Since this development, commercial insurance policies have been amended for new and renewing customers, with lockdown losses clearly stated as part of the cover.

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