Coronavirus (COVID-19)—ABI responds to small business owners

Coronavirus (COVID-19)—ABI responds to small business owners

The Association of British Insurers (ABI) has responded to an open letter from small business owners with regard to coronavirus (COVID-19) and business interruption insurance.

The open letter, printed in the Times, was signed by almost 700 small businesses. It said that thousands of small businesses, including hotels, restaurants, dentists, holiday lets and kennels are trying to claim under their business interruption insurance due to the effect of the coronavirus lockdown. It suggested that insurers are failing policyholders, treating SMEs different from other customers and that the ABI has hardened its position. It was also suggested that insurers should cover claims, irrespective of the policy wording.

Responding to each concern in turn, ABI Director General, Huw Evans, stated that he did not consider that there have been any failings by insurers, stating that at least £1.7bn will be paid in coronavirus-related insurance claims, including £900m to businesses and £275m in travel related claims (see: LNB News 20/05/2020 79​).

Evans said that SMEs are not being treated differently, as each claim is examined on a case by case basis.

Evans disagrees with the suggestion that ABI has hardened its position and reiterates previous statements that only a minority of businesses purchased business interruption insurance extensions that would respond to notifiable diseases (see: LNB News 17/03/2020 45).

Finally, Evans states that pandemic insurance is specialist and expensive, and available through the Lloyd's Market. He said:

'We take pride in paying claims quickly and providing a safety net against some of the most common risks you face. No country in the world routinely provides affordable standard insurance cover against the risks of a global, viral pandemic but we will continue to look for future insurance solutions, while ensuring we fulfil the promises we have made to protect your businesses against the risks included in your insurance contract'.​

On the issue whether insurers should respond, irrespective of the wording, Evans states that this is not possible from a legal and regulatory standpoint, and would require state support.

Source: ABI responds to open letter from small business owners and representatives

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