Small businesses are celebrating a ‘huge win’ after insurer RSA decided to pay holders of certain business interruption policies.
Hordes of companies had taken out so-called ‘Resilience’ policies from RSA, through insurance broker Marsh.
They expected these business interruption policies to cover them for losses when they were forced to close during the coronavirus lockdown.
Hordes of companies took out ‘Resilience’ policies from RSA. They expected these business interruption policies to cover them for losses when they were forced to close during lockdown
But RSA, along with other insurers who offered similar policies, refused to pay out – claiming that the policies were not designed to cover a nationwide pandemic.
The Financial Conduct Authority (FCA) took RSA and seven other insurers to court, to have judges decide on the matter.
Last month, the two judges ruled that RSA should be forced to pay businesses which claimed under the Resilience policy.
RSA was planning to appeal to the Supreme Court, the highest court in the land.
But it has dropped its challenge, and will start assessing the value of claims and making interim payments where necessary.
Sonia Campbell, a lawyer at Mishcon de Reya who is representing policyholders, said it is ‘a huge win’ for the businesses, but added: ‘Given the insurers’ approach to policyholders’ claims to date, businesses should not expect it to be plain sailing.
Every policyholder has to prove its loss, and this is where we expect insurers to continue to frustrate the process.’
RSA declined to comment. It is still challenging the High Court’s decision on other policies.
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