LONDON: Small businesses, from restaurants to nightclubs and wedding planners to beauty parlors, have won the right to insurance payouts after Britain’s highest court ruled their policies should cover losses caused by coronavirus lockdowns.
Six of the world’s largest commercial insurers Hiscox, RSA, QBE, Argenta, Arch and MS Amlin argued many business interruption policies did not cover widespread disruption after Britain’s first national lockdown last March.
But the UK Supreme Court dismissed appeals by the insurers after scrutinizing non-damage insurance policy clauses which cover disease, denial of access to business premises and hybrid clauses in a victory for the regulator and policyholders.
Insurers must pay small businesses for lockdown losses, court rules
The Supreme Court decision could affect almost 400,000 small firms with business interruption policies
15 January 2021 • 6:24pm
Hundreds of thousands of struggling businesses hit by coronavirus restrictions including bars, restaurants and nail salons could be entitled to a payout following a landmark court ruling.
In a closely watched £1.2bn legal battle that began last year, cash-strapped businesses with business interruption insurance policies have been demanding payouts for heavy losses suffered when they were forced to shut during the first lockdown.
However, the Supreme Court has now substantially allowed an appeal brought by the Financial Conduct Authority on behalf of the companies, potentially affecting up to 370,000 firms holding 700 types of policies issued by 60 insurers.
4 Min Read
LONDON (Reuters) - Small businesses, from restaurants to nightclubs and wedding planners to beauty parlours, on Friday won the right to insurance payouts after Britain’s highest court ruled many policies should cover losses caused by coronavirus lockdowns.
FILE PHOTO: A man cycles past a mural on the boarded up window of a closed pizza restaurant amid the outbreak of the coronavirus disease (COVID-19) in Manchester, Britain, January 4, 2021. REUTERS/Phil Noble/File Photo
Six of the world’s largest commercial insurers Hiscox, RSA, QBE, Argenta, Arch and MS Amlin argued many business interruption policies did not cover widespread disruption after government efforts to curb the virus from last March.
Small businesses, from restaurants to nightclubs and wedding planners to beauty parlours, on Friday won the right to insurance payouts after Britain's highest court ruled many policies should cover losses caused by coronavirus lockdowns.