Supreme Court backs small firms on business interruption claims
The UK's Supreme Court has found in favour of small firms receiving payments from coronavirus (COVID-19) business interruption insurance policies.
The test case was brought against insurers by the Financial Conduct Authority (FCA). The ruling means that thousands of small businesses are now set to receive insurance payouts covering losses from the first national lockdown.
Eight insurers, including Hiscox, RSA, QBE and MS Amlin, agreed to be part of the test case and the ruling could now cost the insurance sector hundreds of millions of pounds.
Hiscox was challenged by 30,000 policyholders, who formed the Hiscox Action Group, as part of the case.
Commenting on the ruling, Flora Hamilton, Financial Services Director at the Confederation of British Industry (CBI), said: 'At such an uncertain time, this court case provides much-needed clarity to companies across the UK, and relief for smaller firms struggling with cashflow.
'This is significant news for insurers, and regulators will need to work closely with the industry as policies, products and processes are updated to reflect this ruling.'