One of the world’s largest insurance companies has been forced to pay thousands of pounds in interest to small businesses whose Covid insurance payout claims were delayed. The QBE Group’s initial payout just before Christmas of more than £386,000 to 86 companies raises the potential for a total outlay by insurers of up to £1.6bn in interest to customers, it is claimed. About 60 insurers have been accused of unfairly delaying making payouts on business interruption policies to 370,000 small businesses, from restaurants and bars to hairdressers and guesthouses. Last year, the UK’s financial ombudsman ruled that an 8% annual rate of interest should be paid on the sum, pro rata, roughly covering the period between the claim being declined and it being actually paid. The payment by the QBE Group of £386,215 to the clients of the loss assessor is said to be a key step towards thousands more businesses receiving similar payouts. Jeff Salmon, chief executive of Salmon Assessors, said his clients had suffered two years of injustice and that others should come forward to make claims. “To say this was a ‘David and Goliath scenario’ is an understatement,” he said. “It was an uphill slog, with the insurers seemingly purposely procrastinating every step of the way.” About 370,000 small businesses made insurance claims after the coronavirus lockdowns left them unable to trade. Many of those policyholders had their claims initially declined on the grounds that the business interruption policies were not designed to cover a government-imposed lockdown. In 2020, the high court found in favour of policyholders after the Financial Conduct Authority brought a test case to court, but six of the eight insurers named in the case, Arch Insurance, Argenta, Hiscox, MS Amlin, QBE and RSA, appealed. It was not until the supreme court ruled in the policyholders’ favour in 2021 that some claims were paid out. Businesses then sought compensation for the delays in payments. In a key case, the financial ombudsman ruled that a dental practice whose claim had been initially declined but later approved should be paid interest by its insurer, QBE. The company had subsequently sought further clarification of the ruling but paid up just before Christmas. Salmon said that every policyholder should now claim interest from their insurance company if the claim was delayed. With QBE paying out £4,500 on average in interest to each claimant, the total potential cost to the insurance industry was said by Salmon to be more than £1.6bn. A spokesperson for QBE said: “Covid-19 business interruption claims can be very complex. As such, the claims handling process is sometimes unavoidably lengthened. Naturally, QBE always ensures that we comply with all our regulatory and legal obligations related to these claims, that we consider our customers’ particular circumstances and that we handle the claims in as timely a manner as possible.”