Firms win pandemic insurance court battle

Stirling businesses who took out cover against the impact of the pandemic have won a legal battle to force insurers to pay out.

The issue has been subject of a lengthy legal battle, with firms arguing that their business interruption policies covered them due to a provision for infectious diseases.

But many insurance companies refused to pay out on the basis that a government-imposed lockdown was not designed to be included in the cover.

However, a ruling at the Supreme Court last week has now forced insurers to pay up - with around 700 policies affecting 370,000 businesses in the UK believed to be affected.

Stirling’s MP has welcomed the ruling and says it follows “numerous complaints” from local firms about the situation.

Alyn Smith said: “This ruling will bring relief to many thousands of businesses across the whole UK.

“I know from speaking to businesses in my own constituency that the failure of insurers to pay out for cover brought a lot of stress and concern for their ability to continue operating.

“These businesses took out cover -often paying thousands in premiumsin good faith and rightly have the expectation that when something like this pandemic hits, they will be protected.

“What’s important now is that we learn from this. Governments across the world have committed large amounts of funding to support businesses through this crisis, but the UK government’s failure to take decisive action at the very outset on insurers created uncertainty for businesses from the start.

“Insurance policyholders rightly expect that they will be covered under the policies they’ve taken out. This needs to continue to be the expectation, and if a change in the law is required to make that so, then I would seek to work constructively with the government on that.”