Siân Williams-Jones initially thought her business was covered as her policy included a ‘notifiable disease’ clause
Multiple insurers have began to pay out to businesses on policies they previously claimed didn’t cover coronavirus-forced closures, as the financial watchdog revealed those it will test them in court.
There has been a series of disputes in recent months between firms forced to close their doors and insurers who claim their policies don’t cover closure due to the coronavirus pandemic.
One small business owner, Siân Williams-Jones, 40, from Shropshire, told This is Money that she checked her insurance policy and was relieved to find that she was apparently covered for ‘notifiable disease’.
However, when she approached her insurance broker, she was told that the closure of her hair salon wasn’t covered.
She said: ‘They told me there was nobody there who specialises in this claim as they are mainly working from home.
‘They asked somebody to call me back, and they did call me back that same day, but said it was a waste of time pursuing it as I won’t be able to claim.’
Last month The Financial Conduct Authority outlined a plan to resolve this by seeking a legal judgement from the courts on a range of disputed policies.
Yesterday, the FCA released a list of which insurers use the policy wordings it plans to take in front of the High Court in July – and revealed that some insurers have now started to pay out on policies they previously disputed.
Last month the watchdog asked 56 different insurers to provide them with information on their business interruption policies.
Today it said it has reviewed over 500 relevant policies from 40 insurers, and has narrowed this down to 17 policy wordings which it claims capture the majority of the key issues currently in dispute.
The City watchdog has revealed which policy wordings it now plans to test in the High Court
These policy wordings can be found here. The FCA has also released a preliminary list of policies which match the wordings they plan to test, which can be found here. It plans to publish an updated list early next month.
Allianz Insurance |
AIG UK |
Arch Insurance |
Argenta Syndicate Management |
Aspen Insurance |
Aviv |
Axa |
Chubb |
Ecclesiastical |
Hiscox |
Liberty Mutual |
MS Amlin |
Protector Insurance UK |
QBE |
RSA |
Zurich |
But the watchdog also claims that once approached a number of the insurers decided to accept claims that had previously been in dispute.
The FCA did not specify how many insurers did this nor how many claims have now been resolved.
Christopher Woolard, interim chief executive at the FCA said: ‘The court action we are taking is aimed at providing clarity and certainty for everyone involved in these disputes, policyholder and insurer alike.
‘We feel it is also the quickest route to this clarity and by covering multiple policies and insurers, it will also be of most use across the market.
‘The identification of a representative sample of policies and the agreement of insurers who underwrite them to participate in these proceedings is a major step forward in progressing the matter to court.’
The High Court case is set to proceed next month.
The businesses let down by their insurers
Siân Williams-Jones, 40, from Shropshire, is one of the many business owners who thought they were covered for disease only to find their insurance provider pulling up the drawbridge when they tried to make a claim.
Siân, who owns a hair salon, followed the coronavirus developments closely and at first put numerous safety and hygiene measures in place to try and keep trading as long as possible.
However, once the Government ordered bars and restaurants to close in late March, she felt she had no choice but to close her business’s doors.
Siân’s business, hair salon Williams of Welshampton, had been running for 12 years before coronavirus forced it to close its doors
‘I felt it was inevitable the hair and beauty sector would be next to be closed down,’ she said.
‘It had been an extremely stressful couple of weeks prior to this, and I had felt extremely uneasy about the close contact nature of the business, and the implication it could have in myself, my staff, our clients, and even more worryingly, our families.’
After deciding to close on the 21st of March, the Government then ordered all hair salons to close the following Monday, 23rd on March.
Siân said of her broker: ‘They weren’t very helpful and basically said “I know it’s disappointing, but it’s the same for every other business”.’
Siân plans to reopen her business but says she is finding it difficult due to a lack of Government guidelines.
Devon’s Lewtrenchard Manor hotel has had to close its doors but its insurer has refused to pay out – despite the insurance specifically protecting against ‘human contagious disease’
Another business owner, Duncan Murray, who runs Lewtrenchard Manor hotel in Devon (pictured above) told This is Money that his claim was rejected because coronavirus was not reported at his hotel specifically.
Mr Murray’s policy documents, seen by This is Money, specifically state that cover is provided for the ‘inability to use the insured premises due to restrictions imposed by a public authority following an occurrence of any human infectious or human contagious disease’.
He said: ‘We shut on Monday the 23rd [of March] and we’ve been shut since. It has caused a cash flow issue. I had enough to pay my staff and suppliers but now there’s no more money in the bank account. In the meantime I’ve had to apply for a business interruption loan. It’s a very frustrating time.’
THIS IS MONEY PODCAST
- Are we all going on a summer holiday?
- Could your savings rate turn negative?
- How many state pensions were underpaid? With Steve Webb
- Santander’s 123 chop and how do we pay for the crash?
- Is the Fomo rally the read deal, or will shares dive again?
- Is investing instead of saving worth the risk?
- How bad will recession be – and what will recovery look like?
- Staying social and bright ideas on the ‘good news episode’
- Is furloughing workers the best way to save jobs?
- Will the coronavirus lockdown sink house prices?
- Will helicopter money be the antidote to the coronavirus crisis?
- The Budget, the base rate cut and the stock market crash
- Does Nationwide’s savings lottery show there’s life in the cash Isa?
- Bull markets don’t die of old age, but do they die of coronavirus?
- How do you make comedy pay the bills? Shappi Khorsandi on Making the…
- As NS&I and Marcus cut rates, what’s the point of saving?
- Will the new Chancellor give pension tax relief the chop?
- Are you ready for an electric car? And how to buy at 40% off
- How to fund a life of adventure: Alastair Humphreys
- What does Brexit mean for your finances and rights?
- Are tax returns too taxing – and should you do one?
- Has Santander killed off current accounts with benefits?
- Making the Money Work: Olympic boxer Anthony Ogogo
- Does the watchdog have a plan to finally help savers?
- Making the Money Work: Solo Atlantic rower Kiko Matthews
- The biggest stories of 2019: From Woodford to the wealth gap
- Does the Boris bounce have legs?
- Are the rich really getting richer and poor poorer?
- It could be you! What would you spend a lottery win on?
- Who will win the election battle for the future of our finances?
- How does Labour plan to raise taxes and spend?
- Would you buy an electric car yet – and which are best?
- How much should you try to burglar-proof your home?
- Does loyalty pay? Nationwide, Tesco and where we are loyal
- Will investors benefit from Woodford being axed and what next?
- Does buying a property at auction really get you a good deal?
- Crunch time for Brexit, but should you protect or try to profit?
- How much do you need to save into a pension?
- Is a tough property market the best time to buy a home?
- Should investors and buy-to-letters pay more tax on profits?
- Savings rate cuts, buy-to-let vs right to buy and a bit of Brexit
- Do those born in the 80s really face a state pension age of 75?
- Can consumer power help the planet? Look after your back yard
- Is there a recession looming and what next for interest rates?
- Tricks ruthless scammers use to steal your pension revealed
- Is IR35 a tax trap for the self-employed or making people play fair?
- What Boris as Prime Minister means for your money
- Who’s afraid of a no-deal Brexit? The potential impact
- Is it time to cut inheritance tax or hike it?
- What can investors learn from the Woodford fiasco?
- Would you sign up to an estate agent offering to sell your home for…
- Will there be a mis-selling scandal over final salary pension advice?
- Upsize, downsize: Is swapping your home a good idea?
- What went wrong for Neil Woodford and his fund?
- The incorrect forecasts leaving state pensions in a muddle
- Does the mortgage price war spell trouble in the future?
- Would being richer make you happy? Inequality in the UK
- Would you build your own home? The plan to make it easier
- Would you pay more tax to make sure you get care in old age?
- Is it possible to help the planet, save cash and make money?
- As TSB commits to refund all fraud, will others follow?
- How London Capital & Finance blew up and hit savers
- Are you one of the millions in line for a pay rise?
- How to sort your Isa or pension before it’s too late
- What will power our homes in the future if not gas?
- Can Britain afford to pay MORE tax?
- Why the cash Isa is finally bouncing back
- What would YOU do if you won the Premium Bonds?
- Would you challenge a will? Inheritance disputes are on the rise
- Are we primed for a Brexit bounce – or a slowdown?
- How to start investing or become a smarter investor
- Everything you need to know about saving
Some links in this article may be affiliate links. If you click on them we may earn a small commission. That helps us fund This Is Money, and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence.