Business Claims cause turmoil in the Insurance Industry
COVID has wrecked havoc upon peoples lives, the economy and the world. The shock to businesses with the stop and start nature of the crisis has caused many to suffer great losses in their businesses. One such person is Josephine Woodberry who has run a dance and performing arts school for many years, making it her life’s work.
COVID has had a major effect on her business with the government prohibiting physical activities like hers from continuing during the lock down.
Her story is repeated amongst the thousands of businesses that have suffered during the Covid pandemic.
Josephine thought she was covered for a crisis like this because she took out business interruption insurance with AXA XL. This was her safety net should her business suffer through crisis like this. However, her assumptions were wrong and the insurance is fighting the claim.
During the peak of Covid, her business was shut for seven months. Without continued income and rent to pay, her dance school would quickly spiral into a dire state. After calling her insurance broker to start the claim process, to her shock she was told that her claim would not be covered. This would be the same for nearly all businesses claiming under the same condition.
Unfortunately the insurance regulator has stepped away from the issue and has left he industry to come to a resolution. Insurance companies were confident they would win their argument however they lost in their first case causing shares in insurance companies to tumble.
Many big insurers are now making provisions for big payouts to businesses however some insurance companies are expected to fold under the weight of claims that are on their way.
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