COMMENT

FRIDAY’S Supreme Court ruling that insurers should honour coronavirus claims made by small businesses is welcome, but it needs to be followed by swift action to prevent growing numbers from going under.

The ruling gives 370,000 small-to-medium-sized enterprise (SME) policyholders hope that they will finally get life-saving payouts for claims they made on their business interruption policies.there cannot be any delay, as the claims were made during the first lockdown and their financial positions are far worse now.the verdict is likely to cost the insurance sector £1.8billion, but that is a small price to pay compared to the economic damage the failure of so many SMES would cause.

Insurers need to start paying out claims and fast, otherwise the trickle of businesses that are failing will become a flood. Aside from helping to prevent the widespread collapse among SMES, it will also help preserve what is left of the insurance sector’s reputation.

To put it bluntly, denying coronavirus claims on business interruption policies and then fighting the case in the courts has damaged the insurance sector. Insurers are on their way to becoming the new bankers but there is still time to stop that. All they have to do is do the right thing.