Eight months since the UK coronavirus lockdown forced the temporary closures of restaurants, bars, shops, hairdressers and other small businesses, thousands who are still awaiting payouts from their insurers to cover lost income will hope a supreme court hearing will result in a ruling that favours about 200,000 policyholders. Most have not received a penny despite having business interruption insurance, a key part of commercial policies which is supposed to pay out if a firm cannot trade as usual owing to an unexpected event. On Monday, the supreme court will begin a four-day appeal hearing in a test case brought by the Financial Conduct Authority against eight insurers, including Hiscox and RSA. The City regulator estimates that more than 200,000 policyholders will be affected by the result. The Association of British Insurers has put the value of claims at £900m. Richard Leedham is a partner at the law firm Mishcon de Reya who is acting for the Hiscox Action Group, which represents 400 of the insurer’s policyholders. He said: “Just as a second lockdown beds in, and brings many businesses to their knees again, the supreme court hears a case about to what extent insurers will pay out on the first one. With no payouts yet, it puts into stark reality how hard those businesses have had to fight for their insurance money.” Michael Kill, the chief executive of the Night Time Industries Association, which acts for more than 100 pubs, bars and nightclubs, said: “Sadly we have not had any payouts from the existing participants in the case, this is placing exceptional pressure on businesses, possibly in the hope there are less to pay out in the future given the current financial environment.” In mid-September, the high court found in favour of the FCA, the Hiscox Action Group and policyholders on the majority of the key issues, but hopes of rapid payouts were quickly dashed when six of the eight insurers appealed. The FCA and the Hiscox Action Groupare appealing to expand the circumstances in which there would be insurance cover. The original case involved: Arch Insurance; Argenta; Ecclesiastical Insurance Office; Hiscox; MS Amlin; QBE; RSA; and Zurich. The high court found in favour of Zurich and Ecclesiastical so they are not part of the appeal. Stephen Meade, a partner at Capital Law, which advises more than 100 small firms, said: “Insurers are just using different tactics to hold off payment. We see them continue to refuse to pay out on claims relating to policies which were not included in the test case. Insurers are also making deductions for some types of government support received by policyholders during lockdown. “Ultimately, this is a case of decency. Many businesses are struggling to survive, and holding off payment, at this stage, is morally contestable.” Kim Roe, the managing director of Circa Group, a conferences and events firm based in Tunbridge Wells, is still hoping for an insurance payout from Hiscox. “I can’t wait to get this dealt with, it has dragged on forever,” she said. All events booked for this year have been cancelled since the Covid-19 outbreak, resulting in lost income of £500,000. Roe has started organising virtual conferences but said there was “virtually no margin”. The insurance firm said: “Hiscox continues to work with brokers and policyholders to gather information to enable it to process claims without delay once the final outcome of the industry test case is known. Hiscox has paid $150m for event cancellation and other claims relating to Covid-19 this year.” Charles Dark and his wife, Sheila, own The Wynnstay hotel in Machynlleth in mid-Wales, which they had to close on 20 March. They reopened in July, but had to shut again for 17 days during the Welsh “firebreak lockdown” in October. The couple have business interruption insurance cover with QIC Europe which includes “any occurrence of notifiable human disease” within 25 miles of the premises. But the insurer has refused to pay out, even though there have been Covid-19 cases in the area. QIC Europe declined to comment. “That’s going to be the difference between staying alive and not alive for many businesses,” Dark said. The maximum insurance payout the couple can get is £25,000 – but their losses this year are at least treble that figure, he said, and the £50,000 bounceback loan they have taken out will have to be repaid at some point. Mike Cherry, the chairman of the Federation of Small Businesses, said: “We hope to see progress this week, with a fair supreme court ruling to follow and swift payments to those with policies which clearly cover crisis situations like this one.” It remains unclear when the supreme court will issue its ruling.