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Gloucestershire Business News

Court ruling provides welcome relief for small businesses

A Supreme Court decision which could see tens of thousands of small business receive insurance payments for lockdown losses has been welcomed with relief by trade bodies.

The court ruled on Friday that a selection of business interruption policies did include losses from lockdowns.

It follows a test case taken to the High Court by the Financial Conduct Authority after many initial claims were turned down.

Federation of Small Businesses national chairman Mike Cherry said: "For many, it has been a long and difficult road to get to this stage so this will bring clarity and hope to the thousands of firms which have been left in financial limbo for almost a year.

"While this is good news, and while the law has to follow procedure, it's disappointing that so many small businesses have had to wait to get the money they desperately need under policies they believed were there to protect them, policies they bought in good faith.

"Businesses deserve to be protected in a timely way, but instead they have been failed by their insurers and are now trying to make up for lost time."

He called on insurance providers to pay out quickly and keep paperwork for claimants to a minimum.

A survey for The British Beer & Pub Association in May found 56 per cent of businesses in the sector had seen claims for business interruption cover rejected.

Separate research from the British Institute of Innkeepers found only three per cent of pub businesses had been successful with a claim.

BBPA chief executive Emma McClarkin said: "This landmark ruling is great news for pubs and brewers who hadn't received payouts on business interruption insurance thus far.

"It is a glimmer of hope in what is an incredibly tough time for our sector.

"While our sector is far from out the woods yet, this announcement helps resolve some of the uncertainty it has faced on insurance cover and is warmly welcome."

The High Court ruled in September that policies from Gloucester-based Ecclesiastical Insurance do not cover lockdown losses and the company is not required to pay those claims.

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