An SNP MP has called on the UK Government to plug gaps in insurance claims as a result of the coronavirus crisis after she was contacted by businesses abandoned without cover.
Alison Thewliss, the party’s economy spokeswoman at Westminster, said there was growing concerns that many small and medium -sized businesses faced being left out in the cold as some insurers had moved to tighten the wording of their terms and conditions to exclude Covid-19 from policies.
The Financial Conduct Authority (FCA) said most policies held by small firms were unlikely to provide cover for such disruption.
Thewlis said the UK Government should now look at steps to act as an insurer of last resort to cover the gaps in policies and protect businesses.
“It has been a month since I asked the Chancellor to stand behind businesses left without cover by their insurers and so far no support has been forthcoming,” she added.
“Many businesses have paid their insurance policies dutifully and were relying on that cover in order to stay afloat during these challenging times.
“Many responsible businesses have taken prudent and practical steps of taking out an insurance policy to protect against unforeseen events – such as the outbreak of a virus – it now seems incredible that insurance companies can suddenly abandon their responsibilities in this way.”
A spokesman for HM Treasury told The Scotsman: “We have put in place an unprecedented package of support for businesses and individuals affected by Coronavirus, including a business rates holiday, grants to smaller businesses, government-backed and guaranteed loans to assist with business interruption and the Coronavirus job retention scheme.
“The Financial Conduct Authority’s rules are clear that insurers should handle claims fairly and promptly, and we are working with the regulators and industry to ensure the rules are being upheld.”