U.K. businesses receive $1.4B in COVID claims payouts to date
More than 27,000 insureds who had business interruption claims accepted have received at least an interim payment.
Earlier this year, the U.K. Supreme Court ruled in favor of policyholders in a test case brought on by the Financial Conduct Authority (FCA) that disputed business interruption insurance coverage for COVID-19-related losses suffered by thousands of U.K. businesses.
In an update published Sept. 15, the FCA announced that 27,248 out of 42,308 businesses that had COVID business interruption claims accepted by their insurers had received at least an interim payout, totaling more than one billion pounds ($1.4 billion).
The FCA is actively gathering information from insurers on all non-damage business interruption policies that are capable of responding to the pandemic.
The high court’s decision in January 2021 asserted that policies sold by six insurance companies cover losses sustained when businesses were forced to shut down to help slow the spread of the coronavirus. Specifically, the court found that business interruption coverage triggers under most disease clauses, specific denial of access/public authority clauses, and causation and ‘trends’ clauses. Whether or not coverage was provided explicitly depended on the wording of the clauses and how the business was affected by the governmental pandemic response.
According to the FCA, approximately 700 types of policies from over 60 insurers and 370,000 policyholders were affected by the Supreme Court’s rulings.
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