UK probe into Covid BI time‑bars
UK Parliament is investigating whether insurers used contractual time limits to deny valid Covid business‑interruption claims before courts could rule, raising questions about conduct and Consumer Duty compliance. The inquiry focuses on whether time‑bar tactics deprived businesses of meritorious recoveries. (x.com)
MPs tabled a written question on 2 January 2026 asking what steps the Chancellor was taking to stop insurers using litigation to block small-business claims, and the Treasury replied on 8 January 2026 by pointing to the FCA’s role in enforcing fair claims handling. (questions-statements.parliament.uk) Legal advisers and claimant firms have warned that the six‑year limitation period in England and Wales will begin to time‑bar many Covid BI claims from March 2026 unless action is taken. (fenchurchlaw.com) Trade and claimant lawyers have been urging businesses to re‑submit or litigate outstanding Covid BI claims ahead of the limitation deadline, predicting a final wave of submissions to insurers in Q1 2026. (commercialriskonline.com) The FCA’s BI guidance was refreshed in January 2026 and the regulator has reiterated expectations that firms must handle Covid BI claims promptly and meet Consumer Duty outcomes; the FCA says it has powers to act where firms fall short. (fca.org.uk) A central live legal issue is whether insurers can deduct Government furlough payments from BI indemnities; the Court of Appeal decided insurers could, and the policyholders won permission to appeal to the Supreme Court with hearings listed for 11–12 February 2026. (judiciary.uk) The Association of British Insurers previously estimated insurers might face up to about £2bn of Covid business‑interruption payouts (and around £2.5bn across Covid‑related products), a figure that frames the financial scale behind the time‑bar dispute. (abi.org.uk) Industry legal guidance highlights that insurers commonly rely on contractual “suit limitation” or time‑bar clauses and that settlement talks do not always stop those contractual clocks, creating the tactical issues Parliamentarians and claimants are now scrutinising. (jonesday.com)
