Coronavirus insurance payout lifeline for SMEs?
On Tuesday SME owners welcomed the High Court ruling in the landmark COVID insurance payout. It’s estimated that 370,000 businesses and £1.2bn worth of claims will be affected. However, with many SME’s reviewing the outcome, appeals are likely. So how many businesses will be spared from going under by receiving their payouts?
Round one is over, what now?
Following lockdown, several small businesses had to make staff redundant and to close their doors. In many instances insurers rejected the claims for the business interruption losses, bringing the SMEs to the brink of insolvency. It’s interesting to note that the High Court did not rule the insurers were liable across all types of policy wording that were in the heart of the case.
A significant proportion of business interruption policies are not covered, which in the case of Hiscox, means fewer than one-third of originally estimated cases will be considered for payouts.
Resolving the uncertainty
While the economic impact of COVID is still unravelling, the importance of contingency planning, including risk management, has never been more crucial. With the potential threat of a second pandemic wave, we need to have robust preparations in place for any future pandemics.
If your company is facing financial difficulty, please don’t put it off. Contact us for a free initial consultation on 0800 118 2948.
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