Insurer left café owner in lurch over Covid closure
Refusal to pay out saw gutted Angeline’s costs spiral
A popular Cambuslang café has been hit hard in the pocket after its insurance provider refused to pay out over the coronavirus pandemic.
The Tea Bay on the town’s Main Street had hoped its business interruption insurance with Zurich Insurance Group would help cover the cost of Covid-19 closure.
However, owner Angeline Coyle was left stunned when told the insurer was refusing to pay out, leaving her with spiralling costs.
A case is currently being heard at the High Court in London, with eight insurance giants, including Zurich, being challenged over their refusal to pay out.
Angeline said: “There’s a clause you can take out for business interruption. They basically said Covid-19 wasn’t on the list for notifiable diseases, which of course it wasn’t because we didn’t know it existed a year ago.
“They said they understood it was a difficult time but also that they couldn’t possibly pay out.”
Angeline says closure has cost her a substantial sum of money, while she has also been forking out cash to pay for hand sanitiser and protective equipment as the Tea Bay is revamped.
The café is reopening this week, and Angeline says she is relieved they have “made it to the other side”.
However, she feels any help from her insurer would have made a big difference, especially given the amount she pays for cover.
She added: “I think it’s really unfair that these companies get paid a fortune and then they don’t do anything for you when something like this happens. It’s really disheartening and I’m lucky to have made it to the other side.”
Insurers have claimed that business interruption policies are mostly intended to cover physical damages.
This week’s test case is examining 17 policy wordings from eight insurers.
Based on other policies that the regulator has studied, the court’s rulings could apply to up to 50 insurers, who sold cover to 370,000 customers.
Angeline’s case has been taken up by Rutherglen MP Margaret Ferrier, who raised the matter in Parliament recently, and called on insurance providers to be brought to heel for their refusal to pay. Ms Ferrier said: “It is incredibly frustrating for businesses like the Tea Bay who have paid into these policies in good faith, yet this is the only time that they have needed to claim from their insurers and they have found that they are getting no support at all.
“The Treasury and the Financial Conduct Authority (FCA) need to step in to enable as many businesses as possible to claim under their business interruption insurance, otherwise I worry that coronavirus will undermine the public’s faith in the insurance industry to support people during times of crisis.”
A spokesperson for the Treasury said: “In these unprecedented times, we encourage insurance companies to do everything that they can to support other businesses and their policy holders
“The FCA’s rules are clear that insurers should handle claims fairly and promptly, provide reasonable guidance to help a policyholder, and not reject a claim unreasonably.
“We are working closely with the regulators and industry to ensure these rules are being upheld.”