business continuity insurance

Business continuity insurance claims

Since our last update on issues around business continuity insurance, and despite the Supreme Court Ruling that insurers must pay out on business interruption policies for the first lockdown, many home improvement businesses are still waiting settlements and some fear their businesses could close permanently.

More than 60 insurance companies offered business interruption policies, but many refused to pay out during the first lockdown, arguing that only the most specialist policies had cover for such unprecedented events such as COVID-19.

However, a test case was bought by the Financial Conduct Authority which offered hope to thousands of businesses. Initially, the High Court ruled in favour of policyholders but went on to the Supreme Court after insurers and the FCA appealed certain aspects of the judgement.

On 15th January 2021, the Supreme Court found in favour of tens of thousands of businesses who should now receive a pay-out to cover business losses due to COVID-19. The total value of the business continuity claims is estimated to be over £900 million.

Despite the ruling, many businesses are getting frustrated at payment delays. The Association of British Insurers advises:

“Business interruption claims can, in general, be complex to assess and determine quantification.”

They also advise,

“Insurers will support their customers throughout the claims process, with dedicated teams of experts and appropriate resources to manage the volume and complexity of COVID-19 business interruption claims.”

Sheldon Mills, Executive Director, Consumers and Competition at the FCA, commented:

“Coronavirus is causing substantial loss and distress to businesses and many are under immense financial strain to stay afloat. This test case involved complex legal issues. Our aim throughout this test case has been to get clarity for as wide a range of parties as possible, as quickly as possible and today’s judgment decisively removes many of the roadblocks to claims by policyholders.

We will be working with insurers to ensure that they now move quickly to pay claims that the judgment says should be paid, making interim payments wherever possible. Insurers should also communicate directly and quickly with policyholders who have made claims affected by the judgment to explain next steps.”

So, what can you do if you think you have a business continuity insurance claim because of the pandemic but it has been declined?

If you are a home improvement company and you believe your insurance should provide cover for pandemics, please contact QASSS to access our network of experts.

At QASSS, we can introduce you to expert Loss Adjusting services, who can provide independent support regarding complex, major or difficult claims.

To find out more about this service, contact Scott Robinson our Commercial Director.


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