Following the Financial Conduct Authority’s (FCA) appeal to the business interruption test case, the Supreme Court has ruled in favour of SMEs receiving insurance payouts as a result of closures and financial loss due to Coronavirus. This means that Wimbledon businesses who had claims denied earlier in the pandemic may now be eligible for compensation from their insurers.
Sheldon Mills, Executive Director, Consumers and Competition at the FCA, commented:
Coronavirus is causing substantial loss and distress to businesses and many are under immense financial strain to stay afloat. This test case involved complex legal issues. Our aim throughout this test case has been to get clarity for as wide a range of parties as possible, as quickly as possible, and today’s judgment decisively removes many of the roadblocks to claims by policyholders.
We will be working with insurers to ensure that they now move quickly to pay claims that the judgment says should be paid, making interim payments wherever possible. Insurers should also communicate directly and quickly with policyholders who have made claims affected by the judgment to explain next steps.
As we have recognised from the start of this case, tens of thousands of small firms and potentially hundreds of thousands of jobs are relying on this. We are grateful to the Supreme Court for delivering the judgment quickly. The speed with which it was reached reflects well on all parties.
Each policy will need to be considered individually against the detailed judgment to work out what it means for that policy. Businesses can expect to hear from their insurers and should get in touch with their broker, advisor or insurer with questions. Businesses unhappy following their insurer’s assessment of their claim may be able to refer their claim to the Financial Ombudsman Service, whose role is to fairly and impartially resolve disputes.
More information about the Supreme Court judgement and the test case can be found here.