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Insurers Estimate Virus Payouts to UK Firms
30th April 2020
Payouts to UK firms over coronavirus could cost £1.2bn, initial estimates from the Association of British Insurers (ABI) indicate.
Close to £900m will go to a small number of firms that have infectious disease insurance, the ABI says.
Watchdogs are predicting a rise in disputes between companies and insurers over whether their cover includes the financial fallout of Covid-19.
The Treasury Select Committee is urging insurers to be fair with claimants.
Most of the £1.2bn figure is made up of business interruption insurance, but only to those companies which took out specialist policies, such as Wimbledon organisers the All England Club.
ABI chief executive Huw Evans explained why some claims will not result in a payment to firms.
"Most business interruption insurance policies that most businesses have are very much designed to protect them from fire and floor every day risks that protect their businesses and in the small number of cases it's designed to cover illnesses that come on your premises for a short duration they're not intended and not priced to cover a global pandemic."
However Mr Evans also said there will be claims that have to go to arbitration between insurers and claimants over whether they are covered for the pandemic.
If insurers and companies cannot settle a dispute between themselves it goes to the Financial Ombudsman to sort it out. More info