Small Businesses: Insurance

(asked on 18th March 2020) - View Source

Question to the HM Treasury:

To ask Her Majesty's Government what discussions they have had with insurers and the Association of British Insurers about (1) the current, and (2) the future, levels of insurance required to prevent small and medium sized enterprises from becoming bankrupt as a result of COVID-19.

Answered by
Lord Agnew of Oulton
This question was answered on 26th March 2020

The Government is in continual dialogue with the insurance sector about its contribution to handling this unprecedented situation.

In addition, the Chancellor has made clear that, for those businesses which have an appropriate policy that covers pandemics, the Government’s medical advice of 16th March is sufficient to allow businesses to make a claim against their insurance, provided the other terms and conditions in their policy are met.

The FCA’s rules require insurers to handle claims fairly and promptly; provide reasonable guidance to help a policyholder make a claim, and appropriate information on its progress; not reject a claim unreasonably; and settle claims promptly once settlement terms are agreed.

However, most businesses have not purchased insurance that covers losses from COVID-19. The Government recognises that businesses who do not have appropriate insurance cover will require support from elsewhere. As such, businesses should explore the full package of support set out by the Chancellor in the Budget and on 17 March, which includes measures such as business rates holidays and the Coronavirus Business Interruption Loan Scheme.

The Chancellor has announced two packages to support the people and businesses of the UK: a three-point plan providing £12 billion of support for public services, individuals and businesses whose finances are affected by the outbreak; and a package to provide further support for businesses and individuals totalling £350bn.

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