Covid insurance ruling: the business owners who will now get paid

The guesthouse owner

Gary Lovatt, who runs the five-bedroom Laurel Bank guesthouse in Keswick in the Lake District, said he was “very happy” with the supreme court verdict, and “reasonably confident” he would now get a payout from his insurer.

Lovatt had tried to claim between £10,000 and £15,000 on his insurance policy after he was forced to close, but said he did not get very far because of his insurer’s “computer says no” approach.

Asked how much income he had lost, the 61-year-old said it was more than 50%. He said that for a lot of small businesses, the loss of cashflow is a huge issue. “They haven’t got the resources that the large companies [have].”

Lovatt added: “The amounts, to the insurance companies, are quite small – they’re small beer… With a £5,000 claim, that could [pay] someone’s mortgage for six to eight months.”

With these policies generally, Lovatt said the maximum amount someone could claim over a period of perhaps 24 months was about £20,000. A member of the board of directors of the Federation of Small Businesses, Lovatt said that after being told by his insurer, Argenta, that the policy’s business interruption wording did not cover him, he started “gathering the evidence. Then the FCA decided to take it up.” Rupert Jones

The marketing agency owner

Simon Young made a claim with insurer Hiscox in March 2020 for his marketing agency Institution. His firm has stayed open during the pandemic, but some of the 12 staff have been furloughed, and the Doncaster office is out of use.

Responding to the supreme court judgment, Young said: “That’s fantastic. The cynic in me says how does this now play out, and when will we actually get paid?”

He added: “When I took out the policy I never envisaged this would happen – it was more for if there was a fire at our building, or something like that. I thought it would pay out for not being able to use the office, and to provide a level of income while we were closed due to unforeseen circumstances.”

The pandemic seemed to be just that, and in the early days of the crisis Young contacted Hiscox and was told it was investigating what would happen to policies. Later he was told that his claim was on hold while the court case was heard. Since then there have been occasional updates from the insurer, but nothing more.

Young said a successful claim would be worth “tens of thousands of pounds” to his business, and help support jobs.

“I am lucky – I’m not reliant on the claim coming through, but I think of the people who have lost their businesses over the past year, or need this to keep going.”