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UK Pandemic Insurance Payments Overview:
- Who: The UK’s Financial Conduct Authority (FCA) released data earlier this week showing insurance companies have paid out £636.7 million in full settlements, plus another £308.8 million in interim payments, to policyholders for business interruption since January.
- Why: A High Court case was brought last summer by the FCA against eight insurers to force a ruling whether business closure policies should pay out for pandemic-related closures. In January, the Supreme Court ruled that insurers are liable in such instances.
- Where: The nearly £1 billion in insurance payments have been paid to businesses across the UK.
Insurers have forked out nearly £1 billion to companies that say their businesses were interrupted by the coronavirus pandemic, after a landmark legal ruling.
The Financial Conduct Authority (FCA) released data on Monday saying insurance companies have paid out £636.7 million in full settlements to policyholders with cover for business interruption since the landmark case in January.
They’ve also paid £308.8 million in interim payments, for a total of £945.5 million.
A High Court test case was brought last July by the FCA against eight insurers in order to force a ruling on whether policies on business closure that had additional clauses would offer cover to companies affected by the pandemic.
In January, the Supreme Court ruled that in most cases, insurers are liable.
By June, more than half of companies that had filed valid business interruption claims due to the pandemic had already had a payout from their insurance companies, the FCA said.
More than 20,300 of 37,700 policyholders who have had their claims accepted up to June had got a full or partial payment.
This was especially true when the policy offered cover for closure as a result of outbreak of infectious disease.
“We remind firms of the need to handle claims promptly and fairly and to provide reasonable guidance to help a policyholder make a claim,” the FCA said.
“Any [business interruption] policyholders who believe they may have a claim but have not submitted this to their insurer should do so as soon as possible in accordance with the policy document,” it said.
Meanwhile, Stonegate Pub Company has lodged an £845 million lawsuit against its insurers claiming they failed to properly calculate their losses during the pandemic.
This news comes as UK insurer Hiscox reportedly agreed in June to settle class action claims made by a group of about 400 companies alleging their business interruption insurance claims during the COVID-19 pandemic were improperly denied.
Have you tried to file an insurance claim related to the pandemic? Let us know your experience in the comments!
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