A landmark Supreme Court ruling forcing insurers to pay out on disputed coronavirus claims worth at least £1.2 billion has been welcomed by a Keswick man who was instrumental in bringing the case to court.
Guest house owner Gary Lovatt, director and procedures chairman with the Federation of Small Businesses (FSB), the largest political lobbying body in the country with 160,000 small business members, said he was delighted by the ruling which was likely to throw some enterprises in the North Lakes a valuable lockdown lifeline.
The case was brought before the courts after some insurance companies refused to pay out business interruption claims.
These replace income lost in the event that business is halted due to direct physical loss or damage, such as might be caused by a natural disaster.
Insurance companies had several arguments why they should not have to pay out.
Some said their business interruption clauses were only activated if a local disease caused a business to suffer and because the coronavirus lockdown was a national issue, they argued that they did not have to pay out.
Mr Lovatt initially raised concerns about the stance being taken by insurance companies to the FSB’s policy team in London and it was then highlighted to the Financial Conduct Authority.
A panel of people from across the country was set up and it pulled together case studies and 13 “policy wordings” were presented to the FCA, which brought the matter to the attention of the courts.
The FCA won the initial case in the lower courts but the insurance companies went to appeal. The case “leap-frogged” over the Appeal Court and was brought before the Supreme Court where six of the world’s largest commercial insurers lost in their appeal which claimed that many business interruption policies did not cover widespread disruption.
“There will be a number of policy holders in Keswick affected by this and even if it accounts for payouts of between £5,000 to £10,000 that is going to help them through an elongated lockdown,” said Mr Lovatt.
