Insurers must pay out quickly
FROM March last year many businesses were left distraught – some on the brink of survival – when insurance companies refused to pay out on their business interruption policies.
Small business owners, many paying thousands of pounds per year for many years for policies, discovered that when they most needed this payout, to cover the interruption of Covid lockdown, it wasn’t there for them.
Many small pubs, bars and restaurants, forced to close, had been dealt a further blow by their own insurance companies, which were supposed to be there to assist them.
Business owners waited with bated breath for the court’s verdict on this on Friday.
Victoria Stewart, of The Alchemist Group, a Cheshirebased group of 20 cocktail bars and restaurants that employs more than 1,000 young people, said: “We pay more than £100,000 a year in insurance premiums so couldn’t believe it when we were refused the business interruption payout. I’m not sure what could be more of an interruption than complete closure for months.
“It’s fantastic news to hear the courts overturn the insurers’ arguments. For larger hospitality businesses like ours this will help towards the NI and pension costs of keeping our talented teams in work during this latest lockdown.”
Smaller pubs fear they may still not be covered as they wait for their brokers to work through the details. Nicola Newton, of the Rose & Crown in Knutsford, is still waiting to hear if her business is covered.
Other businesses, which are covered, fear that if the insurance companies take their time paying out then they won’t be around to receive the payout they are due.
The message to Government after this much welcome judgment from the Supreme Court is to ensure there are early payouts or an interim payout.
We need those companies to survive this pandemic and interruption to their business, and we need those people to have a job waiting for them as the economy opens back up.
It won’t be such a big win if these companies don’t survive or get their legally entitled payout in time.
This court decision must be honoured and implemented immediately.
Without them knowing it, this decision by the Supreme Court could save insurance companies from themselves – as many small businesses have asked me what’s the point of paying for any insurance if they don’t pay out.
I agree and it seems the courts do, too.