Small firms celebrate partial FCA business interruption victory amid jobs shock

Added by Love Business East Midlands | 7 October 2020

Responding to the result of the Financial Conduct Authority (FCA)’s business interruption test case

Federation of Small Businesses (FSB) National Chairman Mike Cherry, said:

This ruling marks a big step forward. It can only be celebrated as a partial victory, however, as it still leaves many with little certainty around whether they will receive pay-outs for policies that have cost them thousands. And for many others with standard interruption cover, this judgement will have no bearing. The FCA was absolutely right to argue that disease or denial of access clauses within interruption policies should trigger pay-outs in the event of coronavirus-linked disruption. We’re hugely grateful for its work in this space.

We echo the regulator’s call to insurers to reflect on the clarity provided by this judgement and do the right thing by policyholders, many of which are fearing for their futures after six months of serious disruption. They acted responsibly by taking out these policies, and having them honoured is crucial to encouraging more firms to do the right thing where insurance is concerned.

Today’s employment stats highlight how challenging the current economic climate remains for small firms. It will take the collective effort of financial services firms, government at all levels and consumers to help them through this severe recession.

With the job retention scheme winding down, policymakers need to look very closely at what policy measures should follow it to ensure jobs are protected at ultimately viable businesses – a targeted successor scheme may well be needed.

Equally we need to look at creating future-proofed roles that will be required as our economy changes over the months and years ahead. Bringing down the costs of employment – especially employer national insurance contributions – and making sure policy interventions, such as the kickstart initiative, work for small firms are absolute musts.

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