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Covid insurance ruling a "lifeline for small businesses"

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Small businesses who want to claim insurance for the disruption caused by the coronavirus should feel empowered by a landmark court ruling, a leading Midlands solicitor has said.

Jessica McSorley said last week’s verdict in the Supreme Court against six major insurers means pubs, restaurants, hairdressers and other businesses that were forced to close in the lockdown can receive a pay out if they are insured for business interruption and have clauses on disease and prevention of access.

The verdict in the test case, which was brought by the Financial Conduct Authority, has removed the need for policyholders to wrangle over the interpretation of their individual polices with their insurers – a situation that had left many people out of pocket with insurers refusing to pay out.

Miss McSorley, from law firm mfg Solicitors said: “This ruling could be a lifeline to many thousands of small businesses who have struggled or lost money during the Covid-19 pandemic.

“If there is a disease clause in the policy for business interruption insurance, the policyholder only has to demonstrate that there was one confirmed case of coronavirus within whatever radius is specified in the policy. And if there is a prevention of access clause, that means it may be possible to claim for losses due to lockdown restrictions.

“Making a claim is still going to require careful checking of the wording of a policy against the Supreme Court ruling – and that means policyholders may need to seek advice as to where they now stand – but this will have a massive impact and creates huge opportunity.”

Miss McSorley said policyholders should get in touch with their insurers if they wished to make a claim, while those who had already done so should be contacted in due course.

The insurers involved in the court case are Arch, Argenta, Hiscox, MS Amlin, Royal and Sun Alliance and QBE, but the verdict will have a bearing on the wider insurance market.

For advice on what to look out for in a policy and the likelihood of a successful claim, contact Jessica McSorley on or call 0845 55 55 321.