Insurer claims government grant counts against loss of income

treesandfields

Hi everyone! My insurer (NFU) has asked me to provide details of any government support my business has had as part of my loss of earnings claim. They want to count government grants against loss of earning to reduce the payout. Has anyone else had to provide this info to an insurer? Can my insurer legally ask for this info? Can I refuse to provide the info and still insist of the claim being reviewed?
This doesn't seem right to me as it is effectively transferring the government small business grants to subsidize insurer's pay-out liability.
Any help would be greatly appreciated as I don't know who to turn to on this one. Thank you!

kingfisherblue

treesandfields said:

Hi everyone! My insurer (NFU) has asked me to provide details of any government support my business has had as part of my loss of earnings claim. They want to count government grants against loss of earning to reduce the payout. Has anyone else had to provide this info to an insurer? Can my insurer legally ask for this info? Can I refuse to provide the info and still insist of the claim being reviewed?
This doesn't seem right to me as it is effectively transferring the government small business grants to subsidize insurer's pay-out liability.
Any help would be greatly appreciated as I don't know who to turn to on this one. Thank you!

It sounds fair enough to me. If the government has already paid you some or all of your loss of earnings, and the insurer paid out too, you would be paid twice over. I assume that the insurer has asked to prevent that happening.

treesandfields

Thank you for the reply kingfisherblue. Agreed it is financially fair for me personally but it still doesn't feel right from a legal perspective. Surely my insurer is legally obliged to pay out for a loss which I insured against no matter what else has happened in my financial situation? It also seems very unfair that all this goverment money is now going to bail out insurers through a back door. It was intended to support small businesses not insurers.

LilElvis

Doesn't SEISS have to be declared as income for Self Assessment purposes? If so it sounds fair that the insurer also counts it as income when calculating your loss of earnings.

Sibbers123

SEISS is treated as income and taxed as such so should be taken into account when calculating loss of earnings. 

There is an argument that if you were insured for loss of earnings due to a pandemic, you may not have been entitled to claim the SEISS in the first place but who knows...

Grumpy_chap

I understand why the OP see this as unfair.  It is the nationalisation of the payout and privatisation of the profits - maybe an issue for the lawmakers to get involved in.  Then again, that element of the payment from the insurer should probably be returned to the Government.

It is similar to if you are insured twice for the same thing.  This can happen if, for example you have a car accident and there is a legal case that follows for whatever reason.  This will be covered by the car insurer but they will also ask whether you have other legal cover (for example with home insurance or packaged bank account) and if there is other insurance covering the same thing, then all the policies will contribute a proportion to the cost.  Sadly, the insured will not get the money 2 or 3 times and nor will the insured get a premium refund for having insured the same risk more than once.

Jeremy535897

Sibbers123 said:

SEISS is treated as income and taxed as such so should be taken into account when calculating loss of earnings. 

There is an argument that if you were insured for loss of earnings due to a pandemic, you may not have been entitled to claim the SEISS in the first place but who knows...

It depends on how the loss in profit is computed for the claim. If it is based on previous year profits, and the business had doubled its capacity because of almost certain increase in demand (pre pandemic), the business has still been adversely affected by coronavirus.

SEISS is treated as part of the trading profits of a continuing business, so it would naturally fall to be counted as part of current results. The insurers are correct. 

TN1984

Whilst the government I am sure will appreciate your concern, the relatively small number of cases of this are likely to be the least of their worries right now. From your point of view, it does not matter where the money came from, I would just be thankful you are getting support and can (hopefully) keep your business going, which was what these schemes were there for in the first place.

lincroft1710

Cannot see NFU are doing anything wrong. They don't want to pay out more than they have to and thus help keep premiums down

Galloglass

Surely my insurer is legally obliged to pay out for a loss which I insured against no matter what else has happened in my financial situation?

It'll be even worse if you could have applied for the grant and didn't. When it comes to loss, you are obliged to mitigate that loss rather than profit from it. The principle is as old as the hills.

Virtually everything the government is doing is to keep the banks afloat though it is indirect this time.

diggingdude

Probably be more fair if NFU refunded the taxpayer for that payment