Insurers continuing to play 'fast and loose' with business interruption claims

Provenio Litigation LLP is preparing to launch legal action on behalf of thousands of claimants still struggling to secure business interruption payouts from insurers almost exactly five months after the Supreme Court found considerably in favour of policyholders​​ following the Financial Conduct Authority's (FCA) test case relating to losses suffered due to the Coronavirus pandemic.

The judgment is legally binding on the eight insurers that agreed to be parties to the test case, and also provides authoritative guidance for the interpretation of similar policy wordings and claims.

At the time the FCA test case was estimated to affect as many as 370,000 policyholders including thousands in the hospitality sector, but latest figures from the FCA show that insurers have accepted claims in just 35,438 cases.

“Despite the Supreme Court ruling and public assurances to the contrary, potentially legitimate claims in the hospitality sector are still being rejected, delayed or not met by insurers," says Mark Goodwin, managing partner at Provenio Litigation LLP.

“In its latest guidance, the FCA has again had to remind insurers of the need to handle claims promptly and fairly.  

“If insurers continue in the same vein, it is likely that legal proceedings will be necessary to hold them to account.”

The FCA is collating data on payments by insurers on policies which are, in principle, capable of responding to the Covid-19 pandemic. However, several insurers have provided a nil return.

In a statement, the FCA said: “We noted some insurers may have reached different conclusions on whether similar policies are, in principle, capable of responding to the Covid-19 pandemic.

"This is particularly the case for policies which require the policyholder to prove the presence of coronavirus at the premises. This may affect the number of accepted and pending claims that some insurers have reported.”