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TODAY'S OTHER NEWS

Business Interruption Insurance Scandal - bid to speed up pay-outs

The many agents believed to be awaiting pay-outs on their Business Interruption Insurance will have some consolation in knowing that the pressure is on to get a final settlement of the issue.

Earlier this month the High Court ruled in favour of policy-holders on most aspects of a test case brought by the Financial Conduct Authority; this case attempted to push insurers into paying out on BI policies. Many insurers had argued that the current pandemic was not one of the reasons for paying out on their policies. 

The FCA says this High Court verdict will affect claims by some 350,000 small and medium sized firms, including hundreds - possibly thousands - of estate and lettings agencies.

The insurers appealed the decision, however, and now the FCA has used a procedure to help speed up the appeal decision. It has filed a 'leapfrog' application to appeal to the Supreme Court. 

A statement from the authority says: “The FCA's intention has, throughout the process, been to achieve clarity on affected BI policies at speed. We believe that clarity was provided in the initial judgment handed down on September 15.

“The FCA therefore continues to work closely and at speed with the eight insurers and two intervenors that participated in the test case to reach an agreement in principle on a range of issues whereby an appeal process would not be required, and payments would be made on eligible claims as soon as possible. Positive discussions continue with all parties.

“The FCA's 'leapfrog' application has been filed on a precautionary basis in the event that this agreement is not reached by close of business Wednesday [today]. The FCA understands that seven insurer parties have made similar precautionary applications.”

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