Business Interuption Insurance

Tens of thousands of small businesses will receive insurance payouts covering losses from the first national lockdown after a test case. The Supreme Court found largely in favour of small firms receiving payments from business interruption insurance policies.

Insurers involved in the test case are Arch, Argenta, MS Amlin, QBE and RSA – but as many as 60 insurers sold similar products. They will now pay out on many, but not all, policies.

What is this case about?
In the lockdown of last spring, 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.

It was agreed that a selection of policy wordings should be tested in court, setting the parameters for what would be considered a valid claim.

The ruling provides guidance for a wider pool of 700 policies, potentially affecting 370,000 small businesses.