“Plain English”. Clear, simple words that can be understood by all: that’s something we’d hope to see being used in all public transactions.
And that’s often what big businesses say they are intending to offer their customers.
So when small independent businesses around the land – say a lovely suburban cafe in Sheffield whose owner I’ve been speaking to in the past couple of weeks – bought ‘comprehensive all risks insurance policy’, that’s what they thought, or at least hoped, they were getting.
Then came the Covid-19 pandemic and they found that wasn’t what they had. They had cover for “business interruption”. Just not this business interruption.
Business, certainly, was interrupted, indeed stopped by government measures. Even when that complete diktat is removed, it is obvious that social distancing and community caution are going to mean operating as before is not an option. “Interruption” for the hospitality sector is going to continue for the foreseeable future.
Yet the insurance companies have told almost all their insurees they won’t pay out. Hospitality UK has reported that 71 per cent of members who had made claims had them turned down; one per cent had been accepted.
Their grounds given for why they should not seem to have been shifting. There was an initial suggestion that because the Covid-19 SARS-CoV-2 virus (which almost certainly didn’t come into existence until December 2019) wasn’t on a list of disruptive diseases. Well, no, it couldn’t be on any list before it was known to exist.
It is not as if the risk of a pandemic disease was not known – the government’s national risk register of civil emergencies has long put that at the top of the list. And yes this is enormous, but that’s what insurance companies are supposed to be for. They make good profits a lot of the time and are expected to pay out when things go wrong.
Then the story of why no payouts changed. The explanation I’ve received twice now from the government, including from Lord Agnew of Oulton, has been “when one takes out a general business policy, one has the option of an extension for pandemic cover. The problem is that I think most businesses did not elect to do that.”
That was not the understanding of the Sheffield cafe owner, who thought she was getting the best possible cover. And that reflects the views and experiences of many other small business owners.
But there is another possible ground under which cover can be claimed – physical damage. It is classed as assault, indeed now an aggravated assault, should you spit on someone and claim to be infected with Covid-19.
The presence, or possible presence of the virus, is seen by the law to cause harm. So too to a business forced to close because the virus might be caught on its premises.
The argument is clear, but if the massive, multinational insurance companies refuse to pay, they’re effectively saying “see you in court”.
The situation we’re in feels so very familiar. Giant, wealthy companies, who can employ the most expensive of lawyers, ranged against a large group of small independent owners. To say the playing field is not level is a serious understatement.
All too often, you get the law you pay for, the law that you can afford to enforce.
A crowdfunding campaign has been launched to attempt to take this case on – well done to the people setting that up – and I know from environmental and social justice campaigns that you can win under such circumstances, but it is tough.
In the business world there’s a huge imbalance of power in our economy in which most major sectors are dominated by a handful of giant sharks, something that’s become more pronounced in recent decades as many medium-sized enterprises have been pushed aside or swallowed up. A small business can only dart through the reeds like the minnow it is, seeking not to get swallowed or squashed.
Of course, being an impartial referee, seeking to balance the scales and provide legal fairness, is – or could be – the role of government.
In some US states, notably Ohio and Massachusetts, legislators have moved to ensure that insurance companies are forced to pay out, at least to businesses with 100 or fewer employees. It provides for the cost to be shared among all insurance companies in the state.
Twice I’ve asked the government whether it would consider a similar step. Twice I’ve got a very firm no.
The government’s response on small business is that it is arranging loans for them, and indeed it has just responded to pressure to make these loans more accessible and practical.
But loans have to be paid back, and not every business person is in a position to take that risk, particularly those in the hospitality sector facing such a long period of uncertainty.
The Night Time Industries Association has come up with an alternative proposal, which it put to Chancellor Rishi Sunak, to draw on funds from the PoolRe insurance pool (meant to cover costs of terrorism and which is seen to have more funds than needed).
That’s still not the insurance industry doing what it says on the tin, but it might be a way forward at least for small business people, who’ve been left often with a life’s work, a dream to which they’ve dedicated decades of blood, sweat and tears, hanging on the knife’s edge of destruction, while the safety net they thought they’d paid for – sometimes for decades – has been snatched away.