Kevin Hollinrake says he is delighted that the Supreme Court has ruled in support of small firms.
The Thirsk, Malton and Filey MP, has been campaigning on behalf of businesses to force insurance companies to pay out on Business Interruption Insurance and was one of the first to press for intervention from the Financial Conduct Authority (FCA) and the Treasury.
The judgement made by the Supreme Court on Friday says that insurance companies must pay out on small businesses losses during the first lockdown.
The FCA brought the test case, with the support of eight insurers, including Hiscox, Arch, Argenta, MS Amlin, QBE and RSA .
A large number of businesses on the Yorkshire Coast including pubs, cafes, wedding planners and beauty parlours faced ruin after they had their claims rejected because, whilst their insurance covers business interruption caused by notifiable diseases, the insurance companies argued that only the most specialist policies had cover for such unprecedented restrictions. However, this condition did not appear in the policy document.
Mr Hollinrake said
“This has been a bad year for the reputation of the insurance sector. They have tried to avoid paying out even though it was totally obvious that businesses were covered. Some of them went on to try to offset government grants against any pay outs and tried to use a lockdown week to assess normal turnover. This has added unnecessary stress and hardship to businesses across the constituency and I am very pleased that the Supreme Court has ruled in their favour”.
Business Secretary Kwasi Kwarteng said
“This be a lifeline for tens of thousands of hairdressers, bars, restaurants and other small businesses that did the right thing and closed their doors to protect the health of the nation.”
Huw Evans, Director General of the Association of British Insurers, said:
“Insurers have supported this fast-track legal process every step of the way and we welcome the clarity that the judgment will bring to a number of complex issues. Today’s judgment represents the final step in the appeal process. We recognise this has been a particularly difficult time for many small businesses and naturally regret the Covid-19 restrictions have led to disputes with some customers. We will continue to work together as an industry to ensure customers have the clarity they need when it comes to what they can expect from their business insurance policies.”
The ruling could cost the insurance sector as much as £1.2 billion and insurance companies are expected to pay out valid claims without delay.
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