"Latest data from the FCA indicates there are more than 50,000 companies still waiting on their claims while only 10,000 policy holders have received payment."
According to Momenta, the issue lies in proving ‘loss of earnings’ amidst various lockdown tiers, which technically left many businesses able to remain open despite all conditions working against their normal trade.
The London-based contingent resourcing firm has been asked to temporarily staff a number of national insurers due to the additional demand in claims, since the Supreme Court ruling favoured payouts for SMEs in light of financial loss due to the pandemic.
Momenta estimates that a third of business interruption claims will need a specialist case handler to evaluate the "grey area” of what qualifies as a valid claim.
Richard Stevens, CEO and founder of Momenta Group, said: “We have seen a logjam in claims settlement from a specific cohort of SMEs which fall into an insurance assessors ‘grey area’. This is typified by businesses which were seemingly able to stay open, yet their losses fall under the classification of “exceptional circumstances” – a category insurers have left open for claims which need to be investigated, often with greater scrutiny, time and man power.
"This grey area of undefined exceptional circumstances has affected a number of industries from construction to retail and hospitality – all of which had stop-start experiences during tiered lockdowns.
“Latest data from the FCA indicates there are more than 50,000 companies still waiting on their claims while only 10,000 policy holders have received payment. Of the cases we are working on across the industry, a third fall into the ‘grey area’ category, subject to delays and manual scrutiny.
“The recent Supreme Court ruling on business interruption insurance – a document of more than 100 pages – and the fact that up to one third of claims potentially fall into the ‘exceptional circumstance’ category, has placed an enormous amount of strain on claims handlers trying their best to compensate the vast majority of SMEs that desperately need these funds, at speed, to keep afloat. This, in turn, is leading to unavoidable claims settlement delays."
