After today’s landmark ruling, tens of thousands of small businesses will receive insurance pay-outs covering losses from the first national lockdown, following a court ruling earlier today.
The Supreme Court favoured small firms receiving payments from business interruption insurance policies.
The landmark case was significant for a number of reasons as it will allow struggling firms to trade beyond the coronavirus crisis and help pay large debts occurred from borrowing from government and banks to survive throughout the pandemic.
The City watchdog, the Financial Conduct Authority (FCA), brought the test case, with eight insurers agreeing to take part in proceedings. The ruling could cost the insurance sector hundreds of million pounds, as the case was ruled against insurance companies.
One of the UK largest insurance providers Hiscox was part of the proceedings in the Supreme Court ruling challenging policy holders in a row over insurance payments.
It follows as many small businesses made claims through business interruption insurance policies for loss of earnings when they had to close. But many insurers refused to pay, arguing only the most specialist policies had cover for such unprecedented restrictions.
Many business owners all around the country will welcome the decision the Supreme Court has made today, and this will likely see many insurance companies to review their policy and procedures more prudently following the landmark case.
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