Opinion

Insurance ruling prompts ‘rise of PPI type companies' offering claims review

By Steven Swift, Sector Associates

- Last updated on GMT

Case outcome: 'There are a lot of businesses whose policies were not part of the original court case last year and therefore the appeal has no bearing on any claim they want to make,' Steven Swift says
Case outcome: 'There are a lot of businesses whose policies were not part of the original court case last year and therefore the appeal has no bearing on any claim they want to make,' Steven Swift says

Related tags: Legal, MA500, Licensing, Supreme Court, Coronavirus, Insurance

Hospitality insurance specialist Steven Swift of Sector Associates gives his verdict on the Supreme Court’s recent business interruption ruling.

I think some of the headlines in the mainstream media are misleading. While the appeal decision is very positive for those affected – some 370,000 – it only represents a small proportion of commercial customers in the UK. 

There are a lot of businesses whose policies were not part of the original court case​ last year and therefore the appeal has no bearing on any claim they want to make. 

The Financial Conduct Authority (FCA) has published a list of policies affected (it can be found on their website) but unfortunately the majority of policies either specify a list of diseases or require the presence of the disease at the premises. These did not form part of the court case or appeal. 

The trial didn’t address how much to pay under each policy or if each lockdown constituted a separate incident. 

The FCA consultation on how policyholders prove Covid-19’s presence has been extended to 22 January, after which they will issue a finalised guidance document. 

Where cover is in place, we hope insurers pay quickly and avoid any further drawn-out negotiations. 

The insurance industry does not need any more negative publicity and should now aim to settle valid claims as quickly as possible, potentially saving thousands of businesses. 

Time to rebuild trust in insurance

Insurers, solicitors and brokers are now working through the detail of the appeal judgement and how it affects their customers. 

With media reports of £1.2bn of claims, there is a been a huge rise of new payment protection insurance (PPI) type companies offering to review potential claims and “manage” any valid claims with the insurer for up to 40% of the claim payment. We would advise businesses to think very hard about going down this route. 

The Supreme Court has given a verdict and the FCA is preparing a list of all policies affected by the appeal judgement. An Insurance advisor or broker can help with any claim, without the need to lose any part of the claim settlement. 

The insurance industry needs a thriving hospitality sector and business will have floods, accidents and thefts in the future so there is need for both parties to try to move forward. The challenge for insurance is building back the trust which the court case has impacted so badly over the past year.

The market is hardening, we are seeing premiums start to increase in most classes but there are things businesses can do such as reviewing the levels of cover, changes to trading and sums insured.

  • Steven Swift will outline where the sector stands in the wake of the court case, how the relationships need to be rebuilt and what challenges lie ahead when it comes to covering your business at The Morning Advertier’s next MA500 conference on 11 February. 

Related topics: Legislation

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