Business interruption case
Insurers insist firms were not covered by pandemic
Businesses were forced to close and claim they should be compensated (pic: Terry Murden)
Insurance companies told a legal hearing that thousands of small companies who were hit by the coronavirus pandemic were not eligible for business interruption payouts.
Hundreds of firms, which were ordered by the government to shut their doors, believe their insurers should pay out.
But insurance industry lawyers told the Supreme Court that businesses could not claim for losses stemming from nationwide lockdowns to curb the virus.
The insurance firms were defending their position on the first day of a four-day appeal of a test case brought by the Financial Conduct Authority (FCA).
On 15 September the High Court ruled largely in favour of the FCA but the watchdog and the Hiscox Action Group, a group of policyholders that joined the lawsuit, are challenging elements of the ruling, including whether businesses have a valid claim if they are partially closed.
Insurers say they are paying valid claims but that paying out all claims could cost the industry £1.2 billion.
The hearing continues…