VICTORIA BISCHOFF: Insurance sharks risk their reputations being damaged as much as their bank balances
Insurers are in grave danger of being cast as the villains of this crisis.
As we reveal today, small-business owners feel bitterly betrayed after paying tens of thousands of pounds for business interruption cover, only to have their claims denied due to vague small print.
Many of these policies purport to offer financial protection should firms be forced to close due to a ‘human contagious disease’.
Small-business owners feel bitterly betrayed after paying tens of thousands of pounds for business interruption cover, only to have their claims denied due to vague small print
For scores of panicked pub landlords, hairdressers, hotels and restaurant owners, fearful their businesses could soon go to the wall, this clause should have been a lifeline. Instead, all these firms got was a string of excuses.
‘Covid-19 isn’t covered because it is a new disease”https://www.dailymail.co.uk/”loss caused by a national government lockdown isn’t included in the policy”https://www.dailymail.co.uk/”you need to provide evidence of an outbreak in a specific location’ — and so on.
Perhaps insurers did only intend to cover smaller-scale issues such as a local norovirus outbreak rather than a national pandemic. But to any ordinary person, the vague policy wording means this is far from clear.
After all, Covid-19 is clearly a very contagious human disease.
Like most other businesses, insurers are facing heavy losses. Trade body the Association of British Insurers expects its members to pay £1.2 billion in claims to do with coronavirus, of which £900 million relate to business interruption cover.
Insurance firms have also suffered the same hit to their stock market investments as others, which they rely on to pay claims.
Yet, while no one expects insurers to pay out if customers have not bought the correct cover, exploiting their own ambiguous small print to wriggle off the hook is unacceptable.
These firms risk their reputations being damaged as much as their bank balances.
Soften the sting
A year ago, Money Mail welcomed a groundbreaking refund scheme for fraud victims.
Along with a new code of conduct, it was supposed to ensure that those who lost money to sophisticated scammers would get it back — as long as they had not been negligent.
But 12 months on, some banks are still being too quick to blame victims and dismiss claims.
Many have introduced new fraud warnings that flash up when you make an online payment.
But if a customer still goes ahead with a transfer which later proves to be a scam, this should not be reason enough on its own to deny them a refund.
Often the warnings are generic and may not apply to the specific tactics used by fraudsters to con the victim.
I recently saw an alert written in very pale grey text at the bottom of my mobile phone screen. I would have thought such an important warning might be more effective in red and near the top.
There is no doubt that we are in a much better place than we were two years ago, but there is clearly much more work to be done.
And given the revelations yesterday about hackers accessing the email and travel details of around nine million easyJet customers, it begs the question as to why firms which suffer data breaches aren’t also forced to pay into a fraud compensation fund?
Get on same page!
Thank you for the many heartfelt letters sharing your concerns about how you would cope in a cashless world.
Money Mail reader Barbara, of Kent, says: ‘I am making myself ill with worry over the possibility that when the shops open again, the ones I need won’t take cash. I have bad eyes which is why electronic payments are hard for me.
‘I was very relieved to read that the new Chancellor has pledged to bring in new laws to protect cash. I really hope he will not go back on his word after this crisis.’
The Post Office has launched a cash delivery service for those who cannot leave their homes.
It is also offering two services that allow customers to give a voucher or authorised cheque to a trusted person who can cash it on their behalf.
But many of you say that when you ask your bank about these options, staff have never heard of them. It is imperative all banks sign up and train staff to deal with these basic requests.