Self-caterers from across the UK are calling out insurers who are deducting the value of government grant money from payouts made to businesses on policies related to COVID-19.

The #justpayit campaign has been launched by the Professional Association of Self Caterers UK (PASC UK), who represents small, family-run self-catering accommodation businesses and the Cottagesure Action Group (CAG).

CAG is involved in the High Court action against the Royal Sun Alliance to resolve issues with payouts on business interruption policies due to begin on Monday 20th July.

The Government set up the Small Business Grant Fund (SBGF) to support small businesses through lockdown and help them meet the cost of being Covid-secure in order to re-open. Some major insurance companies are deducting the value of grants from insurance payouts made on policies taken out pre COVID-19 to cover business interruption and advanced booking cancellation, or not paying out at all.

The Cottagesure Action Group is fighting for fair treatment in relation to business interruption policies. If successful, the test case will force insurance companies to meet the terms of their policies. #justpayit aims to ensure that insurers cannot deduct grant money from payouts.

The self-catering tourism industry had been hard hit by the pandemic. A recent PASC UK survey found that of 370 responding businesses, half of them expected to lose between 26%-50% of their total revenue in 2020. A further 25% expected to lose between 51-75%. 76-100% said they could not even consider opening until they could fill at least 75% of their capacity. Additionally, 90% of businesses that have made claims against their business interruption policies due to COVID-19 have not had their cover confirmed.

Alistair Handyside, Executive Chairman for PASC UK said: “Overwhelmingly our members are small, family run rural and coastal businesses for whom the Small Business Grant Fund is a critical lifeline intended to help businesses survive, not a grant to fund insurance company profits.  Insurers who deduct grant money are threating our long term sustainability, and taking taxpayers’ money designed to keep us afloat.

“The impacts of COVID-19 on small businesses in the tourism sector have been devastating. Many are now reluctant to make a claim, even though they are rightfully entitled, having paid their premium. We expect insurance companies to honour their contracts and not behave so poorly.”

Some insurers, including Lloyds and Axis are no longer deducting SBGF money and the campaign is determined to maintain pressure on companies like the RSA and NFU in order to stop deductions.

The court case, which is being supported by the Financial Conduct Authority, is seeking legal clarity by asking for judgements on the wording across different policies. Businesses are being impacted by uncertainty over different wording and the various types of cover available.

For more information, visit www.pascuk.co.uk/insurance.