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Insurance: Coronavirus

Treasury written question – answered on 26th March 2020.

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Photo of Lord Hodgson of Astley Abbotts Lord Hodgson of Astley Abbotts Chair, Secondary Legislation Scrutiny Committee, Chair, Secondary Legislation Scrutiny Committee

To ask Her Majesty's Government what plans they have to discuss with the insurance industry the implications of COVID-19 for firms which have taken out pandemic insurance.

Photo of Baroness McIntosh of Pickering Baroness McIntosh of Pickering Conservative

To ask Her Majesty's Government what steps they are taking to ensure that commercial businesses seeking insurance payouts for cancellations or closures due to COVID-19 are covered.

Photo of Lord Agnew of Oulton Lord Agnew of Oulton Minister of State (HM Treasury), Minister of State (Cabinet Office)

The Chancellor has made clear that, for those businesses which have an appropriate policy that covers pandemics, government’s medical advice of 16 March is sufficient to allow businesses to make a claim against their insurance, provided the other terms and conditions in their policy are met.

In addition, the FCA’s rules require insurers to handle claims fairly and promptly; provide reasonable guidance to help a policyholder make a claim, and appropriate information on its progress; not reject a claim unreasonably; and settle claims promptly once settlement terms are agreed.

However, most businesses have not purchased insurance that covers pandemic related losses. As such, any affected businesses should note the government’s full package of support.

The Government is in continual dialogue with the insurance sector about its contribution to handling this unprecedented situation.

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