Gregg's Insurance Dispute

There has been a landmark decision this week (17 October 2022) in the world of insurance.

Payout for insurance claims

The high street bakery chain Greggs, as well as other names in the restaurant, pub and bar industry, have been successful in their initial claims regarding an insurance dispute against insurers who had refused to pay out for insurance claims made by the businesses under their business interruption policies. The judgment is likely to lead to insurers having to pay out hundreds of millions of pounds following this week’s ruling.

The issue was highlighted back in January 2021 when the Supreme Court ruled in a test case brought by the Financial Conduct Authority on behalf of over 300,000 policyholders that insurers should not have refused to pay out for claims which were brought due to interruption businesses faced from the restrictions due to the Covid-19 pandemic.

However, many insurers have argued that their policies were never intended to cover unprecedented events such as the pandemic and have refused to pay out or have tried to cap the amount claimable under the policies.

This week’s decision answered the question of whether the various restrictions imposed by the Government during the pandemic amounted to one single continuing claim (meaning that the policy was subject to a limit) or whether there could be multiple claims, one for each new restriction with the limit which restarted at zero for each one. The judge, in this case, decided that policyholders were entitled to access a new limit for each new restriction.

Following the success of this week’s ruling, Greggs and the other businesses involved will now move to the next phase of calculating the value of their claims against their insurers.