Small Businesses to Receive Covid-19 Insurance Payments
The Supreme Court has ruled that small businesses will receive Covid-19 insurance payments from their insurers for business interruption insurance policies.
The first lockdown, which started in March 2020, meant that many small businesses had to close their doors, however many policyholders found that their insurers refused to make payments, arguing that ‘specialist policies’ were required for the unprecedented circumstances.
As a result, many hair salons were left out of pocket, having to foot the cost of lost earnings and pay for overheads while they were forced to close.
The Financial Conduct Authority (FCA) brought the case to the Supreme Court, with eight insurers agreeing to partake to test policy wordings in court on what would be considered a valid claim. The court favoured small businesses receiving Covid-19 insurance payments from business interruption insurance policies.
This will be welcome news to salon owners and policyholders who were led to believe that their insurance policy would cover the Coronavirus lockdown.
Richard Leedham, who represented the Hiscox Action Group told the BBC: “This is a landmark victory for a small group of businesses who took on a huge insurance player and have been fully vindicated.
“What is important now is that Hiscox accepts the Supreme Court’s verdict and starts paying out to its policy holders, many of whom are in danger of going under,” he said.
Huw Evans, director general of the Association of British Insurers, also told the BBC: “All valid claims will be settled as soon as possible and in many cases the process of settling claims has begun.
“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,” he added.
Find out more about the financial support available to hairdressers during lockdown.