The Financial Conduct Authority (FCA) today urged insurers to pay out for business interruption claims that covered a coronavirus shutdown.
In a letter to insurance bosses, the FCA’s interim chief executive Chris Woolard warned the watchdog would be carefully scrutinising the industry’s treatment of customers.
The FCA said most business interruption policies did not cover coronavirus, but said where insurers have a clear obligation to pay out on a policy, “it is important that claims are assessed and settled quickly”.
The watchdog said one of its key objectives “is to ensure that financial pressures on policyholders are not exacerbated by slow payment”.
It said insurers should make interim payments where it was not clear if a whole claim should be paid in full.
The FCA said that today it is launching a small and medium-sized business team.
The new unit is aimed to coordinate the FCA’s actions across small business issues, ensure regulated firms are supported through the crisis and gather intelligence about the treatment of small businesses by the financial services sectors.