Business: Insurance

Treasury written question – answered on 26th May 2020.

Alert me about debates like this

Photo of Neil Coyle Neil Coyle Labour, Bermondsey and Old Southwark

To ask the Chancellor of the Exchequer, what recent discussions officials in his Department have had with representatives of insurance providers on ensuring that business interruption clauses are upheld for claims made as a result of the covid-19 pandemic.

Photo of John Glen John Glen Minister of State (Treasury) (City), The Economic Secretary to the Treasury

The Government is in continual dialogue with the insurance sector to understand and influence its response to this unprecedented situation and is encouraging insurers to do all they can to support customers during this difficult period.

The Government is working closely with the Financial Conduct Authority (FCA) to ensure that the rules are being upheld during this crisis and fully supports the regulator in its role. The FCA rules require insurers to handle claims fairly and promptly; provide reasonable guidance to help a policyholder make a claim; not reject a claim unreasonably; and settle claims promptly once settlement terms are agreed. In addition, the FCA has said that, in light of COVID-19, insurers must consider very carefully the needs of their customers and show flexibility in their treatment of them.

However, it is important to note that most businesses have not purchased insurance that covers losses from non-property damage. Additionally, while some policies cover losses arising from any disease classed as notifiable by the government, or a denial of access to a building, most of these policies only cover a specific list of notifiable diseases or an incident specifically on the premises of the business. Insurance policies differ significantly, so businesses are encouraged to check the terms and conditions of their specific policy and contact their providers. The terms of a policy cannot be changed retrospectively.

The Government encourages businesses to seek assistance through the wider support package if they are in financial difficulty. Businesses should explore the full package of support set out by the Chancellor in recent weeks, including measures such as business rates holidays, the Coronavirus Business Interruption Loan Scheme, and wage support.

Does this answer the above question?

Yes1 person thinks so

No0 people think not

Would you like to ask a question like this yourself? Use our Freedom of Information site.