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By January 15, 2021 Read More →

AXBRIDGE CHAMBER OF COMMERCE BREAKING NEWS: Ruling expected TODAY for thousands of small businesses in Covid insurance case (after insurers refused to pay up)

Staff at The Drawing Room

Firms who pay business interruption insurance will learn today if they will be able to claim after being shut down by the Covid-19 crisis. The Supreme Court will make the ruling which could see over a billion pounds worth of insurance paid out to struggling businesses.

Waste of money

The BBC reported on London hair salon The Drawing Room that pays £1,200 a year for business interruption insurance but has been denied so far meaning paying the annual premium is effectively a waste of money.

Kevin Peachey reported: “Small businesses are eagerly awaiting a Supreme Court ruling on insurance payouts for those forced to close during the first national lockdown. Many claimed on business interruption insurance policies, but insurers refused arguing there was no cover for such unprecedented restrictions. It was agreed that a selection of policy wordings be tested in court.

“The case has implications for 370,000 small businesses, and involved potential payouts of £1.2bn. Judges at the Supreme Court will set the parameters of whether or not valid claims can be made under these policies. The High Court earlier found mostly in favour of insurers having to pay out to policyholders, in what was regarded by many commentators as a surprise defeat for the insurance sector.”

James Ollerenshaw

Legal precedent

Today’s ruling is the final judgement in the case, and will be have implications for all disputed business interruption insurance cases as it will set a legal precedent.

James Ollerenshaw’s hair salon was one of those businesses unable to operate during the first national lockdown.

The Drawing Room in London’s Spitalfields is owned by James Ollerenshaw who paid an annual premium of £1,200 for business interruption insurance, and importantly disease cover came as part of it. His insurers insisted that the pandemic was not included in the cover. He said if the insurers are forced to pay it would help to cover some costs such as rent but the business would still be in debt due to the shut downs.

Axbridge Chamber of Commerce member Ian Carrotte of ICSM Credit blasted the insurance firms who he said ‘had tried to wriggle out of their obligations.’

He said: “The Financial Conduct Authority brought a test case against some of the big insurers to see if their arguments stood up in court. The High Court only found in favour of a couple of the insurers’ policies with the rest of the policy types that give cover to thousands of small businesses held to be valid and should be paid.”

Today’s ruling in the Supreme Court is over the High Court’s verdict on the two insurers it found in favour which are appealed by the Financial Conduct Authority.

About ICSM Credit

ICSM Credit has more than four decades of experience as a credit intelligence group whose members gain inside information about firms in trouble allowing them to avoid bad debts and rogue traders. To join costs less than a tank of fuel – while at the moment there’s a special free temporary membership offer during the Covid-19 crisis which gives access to free legal letters. ICSM also has an effective debt collecting service which has a global reach – ask for details from Paul.

For details about ICSM Credit call 0844 854 1850 or visit the website www.icsmcredit.com or email Ian at Ian.carrotte@icsmcredit.com on how to subscribe and to join the UK’s credit intelligence network to avoid bad debts and late payers. Follow ICSM Credit on FaceBook, Twitter and YouTube and Ian Carrotte on LinkedIn.

To keep up to date subscribe to the FREE ICSM Credit Newsletter to hear all the latest insolvency news and to see who has gone out of business click on the orange panel on the top left of the home page of the website www.icsmcredit.com or send an email to Ian.carrotte@icsmcredit.com

For details for the work of the journalist Harry Mottram visit www.harrymottram.co.uk

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