Businesses hail ‘life-saving' Supreme Court insurance ruling

The Lazy Claire Patisserie in Belfast. Owner Daniel Duckett said the Supreme Court ruling may help the business get through the rest of the pandemic. Picture by Hugh Russell.

SMALL business owners have hailed as a "life-saver" a UK Supreme Court ruling paving the way to insurance payouts on claims for coronavirus-related disruption.

The Supreme Court ruled largely in favour of an appeal by the Financial Conduct Authority (FCA) on Friday following "widespread concern" over "the lack of clarity and certainty" for firms seeking to cover substantial losses incurred by the pandemic and first national lockdown.

The Federation of Small Businesses welcomed the ruling, saying many firms had been left in "financial limbo" over the past year.

Chairman Mike Cherry said: "Today's judgment is a big victory. It cements the High Court's decision to grant businesses left on the brink the insurance payouts they are rightfully owed.

"For many, it has been a long and difficult road to get to this stage so this will bring clarity and hope to the thousands of firms which have been left in financial limbo for almost a year."

He also called for insurance providers to "pay out quickly", saying businesses deserve to be better protected.

Daniel Duckett, 40, who owns Lazy Claire Patisserie in Belfast, said: "This pandemic has very nearly put us out of business and without the support from insurers, me, my staff and our families have been through a lot of mental stress.

"For months we were unable to open our doors, everything has been up and down and there were times where I thought I'd have to close for good.

"I'm extremely excited and pleased by this ruling, it's just the clarity we needed and may help us through the rest of the pandemic."

Hospitality Ulster said some businesses had felt all was lost and that the costs associated with such insurance policies were “worthless”.

Chief executive Colin Neill said: “Prior to the covid-19 pandemic, business owners acted responsibly and took out policies that would shield them from the worst impacts of their businesses being interrupted.

“Whilst insurance companies have argued, no one could have foreseen a global health pandemic and medical crisis. This is what the insurance is in place for – it’s purchased to mitigate against the unknown.”

Huw Evans, director general of the Association of British Insurers (ABI), welcomed the "clarity" the judgment will bring to a number of "complex issues".

Mr Evans added that the insurance industry expects to pay out over £1.8 billion in Covid-19 related claims.

In a statement, he said: "Customers who have made claims that are affected by the test case will be contacted by their insurer to discuss what the judgment means for their claim.

"All valid claims will be settled as soon as possible and in many cases the process of settling claims has begun.

"Some payments have already been made where valid business interruption claims have not been impacted by the test case ruling.

"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."

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