Landmark win means insurer’s policies do cover Covid losses
More than 300 personal care businesses across the UK and Isle of Man will receive a pay out from the insurer Salon Gold over Covid-19 pandemic losses.
The win in the landmark case means Salon Gold insurance policies do cover losses suffered because of the closure and restrictions placed on businesses during the Covid-19 pandemic, and the insurer will now need to pay out. The claims have been denied by Salon Gold for more than three years.
This decision now also opens the door for similarly worded insurance policies which contain clauses relating to Public Emergency, Denial of Access, Public Authority Incident, Prevention of Access, etc.
RLK Solicitors represented more than 300 policyholders in the personal care sector against their insurance company. The issue questioned whether ‘the actions or advice of the government or local authority due to an emergency likely to endanger life or property in the vicinity of the Premises which prevents or hinders the use of or access to the Premises’ is applicable to the actions the Government took in response to the Covid-19 pandemic in 2020-2021. The arbitrator decided in favour of the Claimants, that their Salon Gold policy did provide cover, and that cover was triggered by government action in response to the pandemic.
The arbitrator also stated that the Covid-19 pandemic alone met the criteria of an emergency – in these circumstances, the pandemic alone triggers cover under the policy. This means all Salon Gold policies should pay out, and without having to prove that there was Covid-19 in the vicinity of the premises.
Salon owner Collette Osborne, also chief policy officer of the Hair & Barber Council and party to the Salon Gold arbitration, described the situation as “a David and Goliath scenario”. “When the Covid-19 pandemic struck, prompting the government-mandated closure of the hair and beauty industry, Salon Gold demonstrated a complete disregard for any communication by actively avoiding engagement with their policyholders,” said Collette.
“However, and throughout this challenging period, salon owners remained obligated to continue paying their insurance policies with insurers seemingly banking on their financial demise before entertaining any form of recourse.”
She added: “This award signifies a pivotal turning point for many, determining the viability of staying in business instead of succumbing to financial collapse. For some, the stakes were so high that homes and businesses were also at risk.”
If you have questions about your own insurance policy, you can contact RLK Solicitors here