I am very pleased that my representations to Treasury has contributed to a decision by 12 major insurance firms not to deduct the Small Business Grant and the Leisure, Retail and Hospitality Grants or the Local Authority Discretionary Grant Fund from any Covid-19 claims payments.
I co-ordinated a campaign supported by 48 cross party MPs and Peers highlighting concerns regarding insurance companies deducting taxpayer-funded business rates grants from business interruption insurance claims. I decided t enlist the support of the Chancellor after I received emails from a number of businesses in his constituency. When the Government announced that certain businesses would pay no business rates this year and would also receive grants of £10,000 for the smallest businesses and £25,000 for businesses in the retail, hospitality and leisure sectors it was clearly intended to help manage their fixed costs, provide a bridge through this difficult period and support their cash flow in exceptional circumstances. It was not intended to count as income for the initial 3-month period that policies tend to cover and should certainly not be fully deducted from claims. It was not the Government’s aim to use precious taxpayers’ money to subsidise pay outs by insurance companies rather than to support our local businesses. I am delighted that the Treasury stepped in to tell insurance companies to make the payments in full.
The Chief Secretary to the Treasury, John Glen MP, set out the Government’s position in a written response to the MPs campaign “I expect all insurers to follow this approach. I have written to the ABI to commend those insurers who have agreed not to deduct grants whilst setting out my firm expectation that those insurers who are not signatories to the letter should also stop making these deductions.”
Phil Hall who owns the Black Swan in Pickering, with his wife, Jill, said “I think it fair to say that the support offered by the Government to businesses affected by mandated closure in March has been unprecedented. It has been a lifeline without which, many of us could not have anticipated resuming operation. It was our belief that the grants we had received were intended to offer a lifeline to us as employers throughout the crisis and not to reduce the insurers liability. Mr Hollinrake has shown an interest in the stance of the insurers throughout the crisis as part of his engagement with us and other businesses in his constituency and more so as it became clear that they were trying to take advantage of the support from government. I believe his direct involvement has been key in exposing this practice and bringing further hope not only to our business, but certainly to others who might otherwise have been facing a very bleak winter”.
The Association of British Insurers has assured the Treasury that where incorrect deductions have already been made they would reviewed and adjustments would be made accordingly.
