Insurers expect to pay out as much as 1.2bn to businesses and individuals hit by the coronavirus crisis.
The figure, which the Association of British Insurers (ABI) described as a working estimate, includes 900m in business disruption claims, 275m in travel claims and 25m for customers covering weddings, school trips and other events.
However, sources are predicting this figure will probably rise. In fact, most of the 1.2bn figure is made up of business interruption insurance.
The initial estimate of 1.2bn in payouts does not include claims made through the major insurance provider, Lloyd’s of London.
Commenting on the ABI’s claims, Commons Treasury Select Committee chair Mel Stride said MPs had heard of many UK businesses struggling to get money from their insurers.
“The ABI has estimated that its members will pay out 900m in business interruption claims relating to coronavirus.Yet, the Committee continues to receive evidence concerning the difficulties that firms are facing in making a successful claim.For example, UKHospitality told us that 71% of its members have had claims rejected, with only 1% having any success, ” she says.
Speaking to the BBC, 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 everyday 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.”