Sunderland BID boss welcomes coronavirus lockdown pay-out ruling
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Sharon Appleby was speaking after the Supreme Court ruled policies ‘will provide cover’ for business interruption caused by the Covid-19 pandemic.
In a landmark £1.2billion case over businesses’ ability to claim on insurance for coronavirus-related disruption, the UK’s highest court “substantially allowed” an appeal by the Financial Conduct Authority (FCA) on Friday, January 15.
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Hide AdThe City watchdog last year brought the test case, which could affect around 370,000 businesses, over the wording of business interruption insurance policies, which some insurers argued did not cover the Covid-19 pandemic.
Sharon Appleby, head of business operations at Sunderland Business Improvement District (BID) and board member of Sunderland Business Partnership, which together represent over 100 members of the city’s business community, said: “News that the big six insurers must pay out on damages inflicted upon small businesses due to the pandemic is a landmark victory for traders and will provide a huge lifeline to those hit hardest by the crisis.
“Throughout this crisis, we’ve worked closely with traders across the city and have witnessed first-hand the sometimes devastating impact it has had on their livelihoods and – as we look to bounce back from this crisis – it’s more important than ever that, when this lockdown is lifted, we all pull together and support our independent businesses by shopping local whenever possible.”
Some businesses which closed during the first lockdown had assumed they would be able to claim on their insurance, under so-called business interruption clauses, but many insurers argued otherwise.
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Hide AdThe insurance companies had several arguments against paying out. Some said their business interruption clauses were only activated if a local disease caused a business to suffer, while other arguments hinged on a precedent set in a 2010 High Court case which found that an insurer did not have to pay out business interruption insurance to a New Orleans hotel after hurricanes Katrina and Rita.
Policyholders who are affected can expect to hear from their insurer soon, the FCA said, and should approach their advisers or insurers with any questions.