Small firms cheers Supreme Court over business interruption insurance claims

Small businesses are applauding a ruling by the Supreme Court that requires insurers to pay out on disputed coronavirus business interruption claims worth at least £1.2bn.

Insurers are being urged to pay up without delay after judges dismiss the industry's arguments over the disputed claims.

Judges were asked to set the parameters for valid claims from various policies following a test case brought by the Financial Conduct Authority (FCA) with the support of eight insurance companies last summer.

The High Court judgment, handed down in September, was widely seen as supportive for the bulk of the estimated 370,000 companies said to be affected by the dispute but prompted appeals by both sides.

A broad range of firms including pubs, cafes, wedding planners and beauty parlours argued they faced ruin when they were turned down by insurers for business interruption policy claims on losses caused by the first national COVID-19 lockdown.

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Six of the world's largest commercial insurers Hiscox, RSA, QBE, Argenta, Arch and MS Amlin, told the Supreme Court in their appeal that many business interruption policies did not cover widespread disruption.

The legal process was soon tracked to the highest court in England and Wales, which dismissed the claims of the insurers and said the challenge brought by the FCA and an action group to explain the position was "substantially allowed".