#UnitedWeStand

67% of pandemic business interruption insurance claims rejected

By Nicholas Robinson contact

- Last updated on GMT

Short-changed: the FCA will help to press insurance companies harder on claims
Short-changed: the FCA will help to press insurance companies harder on claims

Related tags: Coronavirus

Court declarations will be obtained by the Financial Conduct Authority (FCA) for insurance cases where there is contractual uncertainty preventing pubs from receiving business interruption pay-outs.

The announcement has been welcomed by the British Beer & Pub Association (BBPA) and comes after figures show 67% of businesses with pandemic cover have had their applications for a claim rejected, while 33% are awaiting an outcome.

Overall, 56% of those applying for business interruption cover have been rejected, with 44% waiting to hear back.

The BBPA research showed its members were having little success when trying to claim on their insurance policies.

Court decleration

As a result, the FCA’s intervention, saying it intended to obtain a court declaration to resolved any contractual uncertainty in business interruption insurance cover, would be welcomed by the pub trade.

Separate research by the British Institute of Innkeeping found just 3% of pub businesses had succeeded in getting interruption insurance pay-outs.

However, the BBPA added it was not yet aware of any successful claims among its members.

BBPA chief executive Emma McClarkin said there had been a “severe lack of clarity” for pubs on business interruption insurance claims.

McClarkin said: “This has added to the terrible uncertainty our sector faces in what is already a very precarious situation.”

Simply not right

She added: “It is simply not right that 56% of pub business interruption claims have been rejected, while 44% still await an outcome.

“We hope the FCA announcement will help resolve some of the uncertainty our sector faces on its insurance cover.”

Meanwhile, last month (April), the FCA’s interim​ CEO Christopher Woolard warned insurance providers in a letter that they should pay out promptly or explain why not.

He said there would be some cases where firms were not obliged to pay out but, where it was clearly in a contract, there was no excuse.

Related topics: Legislation, UnitedWeStand

Related news

Follow us

Pub Trade Guides

View more

FREE EMAIL NEWSLETTER

Subscribe to The Morning Advertiser

The definitive voice for the pub trade

Get the latest news, analysis and insights from the uk pub sector straight to your inbox!