Businesses that took out policies with insurance companies due to the coronavirus pandemic are expected to receive payouts in policy claims worth over £1bn after a landmark ruling by the UK Supreme Court on Friday.
The case was brought to court by the Financial Conduct Authority (FCA), which will now be working with insurances companies to ensure smooth payouts to businesses.
Stirling MP Alyn Smith said: “This ruling will bring relief to many thousands of businesses across the whole UK. I know from speaking to businesses in my own constituency that the failure of insurers to pay for cover brought a lot of stress and concern for their ability to continue operating.
“These businesses took out cover – often paying thousands in premiums – in good faith and rightly have the expectation that when something like the pandemic hits, they will be protected.”
Many businesses were informed last year that insurers would not pay out on Business Interruption Insurance policies following the COVID-19 outbreak, despite covering infectious diseases. The FCA previously stated that over 370,000 UK policyholders would be affected by the outcome of the case.
Mr Smith said: “Governments across the world have committed large amounts of funding to support businesses through this crisis, but the UK government’s failure to take decisive action at the very outset on insurers created uncertainty for businesses from the start.
“Insurance policyholders rightly expect that they will be covered under the policies they’ve taken out. This needs to continue to be the expectation, and if a change in the law is required to make that so, then I would seek to work constructively with the government on that.”
Featured Image Credit: Tim Mossholder/Unsplash
