MP welcomes supreme court decision on business interruption claims

At the beginning of the pandemic, because businesses understood they were being forced to close due to government restrictions, many local businesses made claims against their insurers for business interruption.

Some businesses had claims rejected despite clear policy wording that gave protection against closure due to notifiable diseases, including in some cases where customers had paid an additional premium for this specific cover.

One of the common reasons for rejection was that even where cases of Covid had occurred within the local area, usually defined as a 25-mile radius, businesses could not show that a particular occurrence had caused their business closure.

Last week, the Supreme Court ruled that insurance companies should review many of these claims and backed policy holder’s interpretation that any occurrence within 25 miles before they were required to close by government was a legitimate basis for a claim.

Kirsten said: “This is a very welcome ruling by the Supreme Court in favour of the many small and medium sized businesses who have been forced to close their doors during the pandemic and were subsequently left high and dry by their insurance companies.

“I’m delighted for the businesses in East Renfrewshire, who operate in a range of sectors, that will have their claims re-examined, and are now likely to receive the compensation they expected under their insurance policy.

“The arguments used by some insurance companies were just absurd, including that policy extensions that had been separately paid for were overruled by a general exclusion in the policy. If that was ever found to be the case the companies would be charging extra premiums under false pretences.

“I congratulate the FCA and the many campaign groups who worked tirelessly to help secure this ruling for businesses. This ruling is a triumph of common sense, and I hope insurance companies will move quickly to deliver the business interruption support their customers are due”.