Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment his Department has made of the effect on businesses of not receiving coronavirus-related business interruption payouts from insurers; and if he will make a statement.

The Government has been in continual dialogue with the insurance sector and is encouraging insurers to do all they can to support customers during this difficult period.

The Financial Conduct Authority (FCA) rules require insurers to treat customers fairly, and 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. The Government is working closely with the FCA to ensure that the rules are being upheld during this crisis and fully supports the regulator in its role.

On 1 May the FCA outlined its intention to seek a court declaration, on an agreed and urgent basis, and for a selected number of key issues, to resolve uncertainty for many customers making business interruption claims. Subsequently on 1 June, the FCA announced the policy wordings that would be tested in the court action and insurers it had invited to participate directly. On 15 July, the FCA published a final list of all the relevant insurers and policies that may have wordings impacted by the final decision of the court. The court hearing began on 20 July, and the FCA expect the court to reach a final decision in early August.

However, many businesses have not purchased insurance that covers losses from Covid-19 related losses. The Government encourages businesses who do not have appropriate insurance cover to seek assistance through the wider support package if they are in financial difficulty.