Insurance industry to pay out on COVID-19 business interruption claims

More than 370,000 small businesses in England and Wales could be due a payout on their business interruption insurance after the Supreme Court ruled in favour of payments being made on previously refused claims and policies.

A number of insurers have lost an appeal against an earlier ruling, brought in a test case by the Financial Conduct Authority (FCA), which required them to payout on existing business interruption insurance policies as a result of the pandemic.

In the first lockdown of spring 2020, many small businesses made claims through their business interruption insurance schemes for loss of earnings when they had to close as a result of the Government’s restrictions.

However, they were soon told by their insurers that they were not eligible for a payout because only specialist policies had cover for such unprecedented events.

Following an outcry from the small business community, many of whom had paid thousands of pounds for insurance coverage, the FCA launched a test case which looked at a selection of policy wordings to establish the parameters for what would be considered a valid claim.

Last year an initial case at the High Court found that some insurers should have paid out for losses caused by the lockdown. Judges ruled that disease clauses found in many business interruption insurance policies should have meant they were covered and been compensated for the loss of income due to the Coronavirus restrictions.

An appeal was then brought and the test case was fast-tracked to the Supreme Court – the highest court in England and Wales – who conducted a four-day hearing last year, before delivering a final ruling.

This latest ruling provides authoritative guidance for these policies, and similar ones that were not part of the case, which will be used by the FCA, the insurance sector, and the Financial Ombudsman to assess claims and make judgements.

This impacts on all eligible policies held at the time of the first lockdown, whether an initial claim was made and rejected or not.

The ruling covers a wide range of matters including disease clauses, whether businesses were denied access to the properties they owned by restrictions and the timing of lost earnings.

Giving the court’s ruling Lord Hamblen said the court accepted the arguments from representatives of policyholders and dismissed the appeals from insurers finding in policyholders’ favour.

Although the initial case only tested a small number of policies from eight different insurers, the FCA has said that the findings could affect up to 700 different policies held by various insurers and lead to payments for more than 370,000 small businesses that hold policies.

Insurers, such as Hiscox, Arch, Argenta, MS Amlin, QBE and RSA, that were involved in the case will now process claims. However, as many as 60 insurers who sold similar products may now also pay out on eligible policies.

Huw Evans, Director General of the Association of British Insurers, has said that all valid claims will be settled and that the process of settling some claims was already underway.

Most eligible policyholders should be contacted by their insurer following the ruling, but businesses are being encouraged to check whether they can make a claim.

As for new claims relating to the latest lockdowns, the insurance industry has said that most policies for new and renewing customers have already been amended and that losses from the latest lockdown measures would be clearly stated as part of the cover.

If you require assistance with any issues related to the COVID-19 pandemic, please contact us on 01522 81 5100. 

Chancellor announces grants worth up to £9,000 for businesses in the retail, hospitality and leisure sectors

The Chancellor, Rishi Sunak, has announced a package of one-off grants worth between £4,000 and £9,000 for businesses in the retail, hospitality and leisure sectors, following the announcement of a nationwide lockdown in England lasting until at least mid-February.

The new scheme will be accessed through local authorities and offers funding based on the rateable value of a closed business’s premises:

  • £4,000 for businesses with a rateable value of £15,000 or less;
  • £6,000 for businesses with a rateable value of between £15,000 and £51,000; and
  • £9,000 for businesses with a rateable value of over £51,000.

This funding comes in addition to the existing Government business support schemes, including grants of up to £3,000 a month for closed businesses.

The Chancellor has also announced a further £594 million for local authorities and the devolved administrations to support businesses that are not eligible for the new grants. The devolved administrations will additionally receive equivalent funding to the main grants to distribute as they see fit.

The Chancellor said: “The new strain of the virus presents us all with a huge challenge – and whilst the vaccine is being rolled out, we have needed to tighten restrictions further.

“Throughout the pandemic we’ve taken swift action to protect lives and livelihoods and today we’re announcing a further cash injection to support businesses and jobs until the spring.

“This will help businesses to get through the months ahead – and crucially it will help sustain jobs, so workers can be ready to return when they are able to reopen.”

For more information about the support available please read our overview published and current on 21.1.2021.

Are you making full use of the Government’s COVID-19 financial support package?

As we enter yet another national lockdown, businesses may be concerned about their ability to survive and succeed in the weeks and months ahead.

The level of support on offer from the Government and local authorities is unprecedented via the various grants, loans and payment holidays now available.

To help you make sense of these schemes, our experienced team have put together a helpful table covering the eligibility for each scheme and how you can apply, which we encourage you to download and read.

Click here to download our latest Summary of UK Government Funding

Businesses should assess their current financial position now and seek the support they require as soon as they can.

Our team are standing by to help businesses with their applications for grants and loans and the ongoing requirements of the furlough and self-employment schemes.

To find out how we can assist you, please contact Richard Hallsworth, Emma Murray, Jo Brown or Richard Grayson on 01522 81 5100.

Third National Lockdown, we’re here to help

Following guidance issued by HM Government relating to the third lockdown we have made some adjustments to how our team is working.

These adjustments have included closing both of our offices in Lincoln and Market Rasen. To ensure that we can still support you throughout this period we have a small skeleton team at both offices making sure that post and other deliveries still move to the right person.

We are keeping in touch with clients by telephone, email and video-conferencing. All of our team working from home are accessible in the normal way.

We are also able to arrange for the collection or delivery of documents by appointment from both offices so please call us to arrange.

Our priority is to support our clients through this challenging time and we would encourage you to contact us, through your usual contact, to talk through any concerns you have. You might think they are small but if they are on your mind pick up the phone and we’ll help.

We have updated our blog with the latest guidance so please take time to read through if you want some general guidance. It can by found by clicking here.

We will continue to update you as the lockdown unfolds over the next few weeks and hope to see you all very soon.


With the colder weather, often comes more staff absences. December, January and February are renowned for increasing levels of absence within companies. But why is this? Many people are struck down by the flu or a cold and stay at home to avoid spreading it round the office. This year, most of us have become more accustomed to regular hand washing, hand gel and wiping down surfaces, however this is essential to keep all winter germs at bay – not just Covid-19! You must have hand sanitiser available to all employees, which will ensure they are disinfecting their hands in-between washes. Additionally, you can promote healthy living, maybe through offering a virtual yoga or mindfulness session or creating a step count challenge for teams to compete in; this could also raise morale and create a fun challenge.

How does wellbeing link with absence?

Winter months can be difficult for many people, the dark mornings and early sunsets can mean that many people don’t see the light of day at all from Monday to Friday, unless they find time for a lunchtime walk.  This can lead to people struggling with their mental health, it is crucial that you check in with your employees and offer any support you have available. Some people may be absent from work as they are finding it difficult to go about their day as they usually would. Furthermore, often people feel stressed in the run up to Christmas with the extra pressure the season brings, both socially and financially. Consequently, people may suffer from stress, exhaustion and anxiety which may result in them taking extra time off. A way to combat this could be to provide stress management and resilience training. If employees feel supported, they will be more likely to share how they are feeling, and their stress or anxiety could be managed together.

Absence and remote working

For many organisations, absences have declined since remote working has gained popularity through the pandemic. This is due to the fact that, with many individuals working from home, they perhaps don’t stay off work with things like the common cold as they can crank up the heating and wear more comfortable clothes than maybe they would in the office – also germs would not be spreading throughout their colleagues. However, people may be absent from work for mental health issues, if this is the case they should be supported in the right way and have regular communication with their line manager to see what methods can be put in place to help them.

Coronavirus Job Retention Scheme – Furlough

Following the announcement of lockdown 2.0, it was stated that the Job Retention Scheme would be extended from 1st November 2020 to 31st March 2021, with the conditions of the scheme set to be reviewed in January 2021. The eligible employers and employees do not need to have benefitted from the scheme before in order to qualify for it this time round. The government will pay 80% of employees’ usual wages for the hours not worked, up to a cap of £2500 a month. As before, employers are required to pay their National Insurance and employer pension contributions.

If the decision is made to furlough employees, employers are obligated to confirm in writing to employees that they are being furloughed, even if the employer is topping up from 80% to 100% pay. Furthermore, a written record of this must be kept for five years. Regarding employees who have previously been furloughed, employers need to communicate that the arrangement has been extended. Employers are able to claim for employees who were employed on 30th October 2020, as long as they have made a PAYE RTI submission to HMRC between the 20th March 2020 and 30th October 2020, notifying a payment of earnings for that employee.

From 1st December, notice periods will not be covered by furlough, this may affect the restructuring decisions for employers and the timescales on this. Furthermore, the Job Retention Bonus of £1000 per employee is no longer available, and we are awaiting further guidance as to whether anything will replace this or not.

Virtual Working and Change Management

Covid-19 has created momentous changes to the workplace globally. There has been a rise in redundancies as well as the closure of many businesses. Other places of work have opted to close offices either temporarily or permanently in favour of remote working. Millions of people around the world have swapped their daily commute for a short walk to their home office,  kitchen table or even sofa. Many businesses have been pro-active in providing remote working resources for their employees, to make the transition from the office smoother and to ensure that the quality of work from their employees doesn’t suffer due to the lack of necessary equipment. However, are employers putting enough focus and effort into the wellbeing of their employees? People need the support more than ever during these times.

Employers need to help their employees, and themselves, navigate how to become comfortable with the innumerable rapid changes that have taken place this year. One of the essential parts of this, is to keep employees informed; the government advice and regulations change regularly, however having a Coronavirus news bulletin for example could help employees process information and be kept up to date. Communication is essential. You need to be in regular contact with your team to assess how they are coping with the situation and ascertain whether or not more support needs to be implemented. It is crucial that Health and Safety is managed effectively, for those who aren’t working remotely, employees need to be safe in the knowledge that the workplace is Covid-19 secure and all of the precautions have been put in place. If this change is managed efficiently, the disruption to your business won’t be felt as strongly and you will have a stronger workforce as a result.

If you would like help putting your employees first or have any HR issues you would like to discuss please contact Laura Reilly on 01522 81 5100.