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Small firms thrown lifeline in insurance test case ruling

Mary Talbot-Rosevear BBC Financial Conduct Authority Insurance Payments Small firms

Bar stools stacked on table behind a window displaying a closed signImage copyright: GETTY IMAGES

Small businesses have been thrown a lifeline after the High Court ruled some insurers should have paid out for losses caused by lockdown.

Judges ruled that the disease clauses in some business interruption policies should have meant they were covered. Following lockdown, a host of businesses had to close and many looked to insurers to cover their losses.

But many insurers disputed the claims, arguing policies were never meant to cover such unprecedented restrictions.

The test case was brought by the Financial Conduct Authority and had the potential to affect 370,000 mostly small businesses.

The insurers can appeal against the decision. Policyholders should hear from their insurer within seven days...


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