Here at Specters Solicitors we come across all kinds of different scenarios related to claiming compensation for business interruption due to the lockdown periods in 2020. Here is one specific example following a recent update from the Financial Conduct Authority (FCA).
I received a Government Support Grant in 2020/2021, can I still make a claim for business interruption?
Last month the FCA published updated guidance regarding Covid-19 Business Interruption Settlement and Deductions made with Government Support.
The FCA first commented on this issue in August 2020 following reports that some Insurers were making deductions for Government support received by Policyholders when calculating payments for business interruption insurance claims.
The recent statement from the FCA updates its guidance and sets out the factors Insurers must take into account when considering whether deductions from claim payments are appropriate.
The assessment should consider:
- The exact type and nature of the Government’s report
- How the Policyholder uses this report
- The type of policy and its precise terms, including any methodology for calculating the value of the claim set out under the relevant section of the policy.
These matters should also be reflected appropriately in Insurer communications with policyholders when making settlement offers on business insurance claims. The FCA warns that it may intervene and take further action when firms do not appear to be meeting the FCA’s expectations and are treating policyholders unfairly.
The FCA have reminded Insurers that during discussions in September between the ABI and the Economic Secretary, the ABI issued a list of firms that had agreed not to deduct certain government grants from payments. In their most recent statement the SCS confirmed that even when the Insurers were not listed, it must still consider the appropriate method of deducting small business grants from claim payments.
It should also be remembered that the Government has said in the past that if Insurers are making these deductions, then Government Funds, i.e. the tax payers’ money is being used to subsidise insurance companies, which they are clearly against.