The long running saga of insurance firms failing to honour agents’ Business Interruption claims appears to be making progress at last.
A Supreme Court ruling earlier this year found in favour of policy holders and against insurers, who claimed that most BI policies did not include Coronavirus - making claims for, amongst other things, the closure of the housing market last spring invalid.
Shortly after the Supreme Court ruling many agents received standard ‘brush off’ letters, claiming the policies did not entitle the firms to any money - despite the legal judgement.
However, the Financial Conduct Authority - which brought the test case triggering the Supreme Court ruling - has been applying pressure and says its new guidelines should ensure most cases are settled by the end of January 2022.
Now the FCA is reporting that insurers have paid out over £765.8m in Covid-19 related BI claims since the conclusion of the test case.
As of June 5, insurance firms have made initial payments for unsettled claims worth £289.5m and final settlements of £467.2m.
For the test case the Financial Conduct Authority represented policy holders against eight insurance firms which had argued that the pandemic was not a valid reason for paying out on policies.
The test case that it promoted affected claims by some 350,000 small and medium sized firms including hundreds, possibly even thousands, of estate and letting agencies, and suppliers to the industry.
The test case involved a sample of 17 insurance policy wordings collated by the FCA, and which it said captured the majority of key issues in dispute between insurers and policy holders.
The FCA’s 184-page claim named eight companies - Arch Insurance (UK); Argenta Syndicate Management; Ecclesiastical Insurance Office; Hiscox Insurance Company; MS Amlin Underwriting; QBE UK; Royal and Sun Alliance; and Zurich Insurance.