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Law360, London (June 14, 2021, 1:35 PM BST ) Insurers have paid out £757 million ($1 billion) in business interruption claims linked to COVID-19 since a landmark court case ended in January, the City regulator has said — more than half of businesses with valid claims have received a payout.
The Financial Conduct Authority said that just over 20,300 of 37,700 policyholders, or 54%, who have had their claims accepted by their insurer have been handed a full or interim payment. The proportion who have received payments has risen from 48% in early May and 38% by April.
"We remind firms of the need to handle claims promptly and fairly and to provide reasonable guidance to help a policyholder to make a claim," the FCA said on Monday.
The regulator has said it will publish claims data from insurers every month after the conclusion of its landmark legal challenge over whether insurers are liable to pay out on claims to businesses forced to close during the pandemic lockdowns ordered by the government.
"Any [business interruption] policyholders who believe they may have a claim but have not yet submitted this to their insurer should do so as soon as possible in accordance with the policy document," the watchdog added.
The FCA brought a High Court test case against eight insurers in July to win a ruling on whether policies on business interruption with controversial additional clauses would offer cover against closures brought about by the lockdowns.
The case was appealed directly to the Supreme Court in London, which ruled in January that insurers are liable in most cases, particularly when a policy offered cover for closure as a result of an outbreak of infectious disease.
The FCA said Monday that insurers have paid out £289.6 million in interim payments to almost 4,200 customers since the Supreme Court ruling. Insurers have paid out £467.3 million in full settlements to more than 16,100 policyholders.
The numbers are based only on the claims that have been accepted by insurers, and do not include rejected cases. According to the figures, 17,355 policyholders have yet to win any form of payment from their insurer.
--Editing by Ed Harris.
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