While the Financial Conduct Authority’s test case against several insurers has come to an end last week the campaign by small business owners calling for insurers to be barred from deducting grant funding from insurance payments has intensified.

The #justpayit campaign sees self-caterers from across the UK challenging insurers who are deducting the value of government grant money from payouts made to businesses on policies related to COVID-19.

The campaign is organised by the Professional Association of Self Caterers UK (PASC UK), who represent 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.

The verdict of the test case will be reserved and handed down at a later date, but PASC UK and Cottagesure have vowed to maintain pressure on companies in order to stop deductions.

As COVID-19 spread across the country the UK 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. However, the campaign says 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.

However there have been some who have changed their approach in recent weeks. A number of Lloyd’s underwriters and Axis have announced they have reviewed their position and have stopped deducting grants from pay-outs. NFU Mutual’s position has also changed on deducting grants on some policies.

Alistair Handyside, Executive Chairman for PASC UK said: “Although the test case has closed, we are determined to battle on and continue with the campaign until this issue is resolved.

“It’s great news that some insurance companies are starting to see the error of their ways – these changes of position clearly show there is no industry rule that says insurers have to deduct grants from pay-outs.

“We know that tourism is one of the hardest hit sectors, however many self-catering accommodation owners are being dealt a double blow with insurers trying to avoid paying out on business interruption insurance – but also deducting the sum of government grants, to minimise their own costs.”

Mr Handyside continued: “The accommodation owners we represent are small businesses and the Government’s Small Business Grant Fund is designed to help businesses survive. The grant is not intended to fund insurance company profits.

“Insurance companies who continue to deduct grant money are threatening our long-term sustainability. This campaign is about stopping them taking taxpayers’ money which is designed to keep us afloat – we look forward to hearing that more insurers are stopping carrying out this immoral practice.”