Insurers playing ‘fast and loose’ over COVID claims

Leading Liverpool lawyer Mark Goodwin is representing thousands of small businesses who are seeing their COVID insurance claims rejected despite a Supreme Court ruling. Tony McDonough reports

Mark Goodwin
Mark Goodwin, founder of Provenio Litigation in Liverpool

 

A Liverpool lawyer says court action may be necessary against insurers he claims are ignoring a Supreme Court over business COVID-19 claims.

Mark Goodwin, founder and managing partner at Provenio Litigation in Liverpool, is ready to act on behalf of thousands of small business owners who have seen their business interruption claims rejected.

On January 15 this year, the Supreme Court delivered its Judgment in the Financial Conduct Authority’s (FCA) business interruption insurance test case, substantially allowing the FCA’s appeals and dismissing the insurers’ appeals.

The judgment is legally binding on the eight insurers that agreed to be parties to the test case and also provides authoritative guidance for the interpretation of similar policy wordings and claims. However, many claims are still being rejected causing hardship for thousands of small firms.

Mr Goodwin said: “In its latest guidance, the FCA has again had to remind insurers of the need to handle claims promptly and fairly. If insurers continue in the same vein, it is likely that legal proceedings will be necessary to hold them to account.”

The FCA test case was estimated to affect as many as 370,000 policyholders – but latest figures from the FCA show that insurers have accepted claims in just 35,438 cases. The FCA is collating data on payments by insurers on policies which are, in principle, capable of responding to the Covid-19 pandemic. However, several insurers have provided a nil return.

The FCA said: “We noted some insurers may have reached different conclusions on whether similar policies are, in principle, capable of responding to the COVID-19 pandemic.

“This is particularly the case for policies which require the policyholder to prove the presence of coronavirus at the premises. This may affect the number of accepted and pending claims that some insurers have reported.”

Provenio Litigation is preparing to act on behalf of policyholders, with the requisite cover, claiming Covid-19 related business interruption pay-outs from insurers. The action is funded by global litigation funder, Therium. As a result, there are no upfront costs for businesses bringing a claim.

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