One of the key differences in the Business PPI market compared to the Consumer PPI market is the lack of a naming convention. In the Consumer PPI market, people simply talk about “PPI”, in the Business PPI market, the PPI policy may be called something entirely different!
Generally, banks did not sell an insurance product to businesses labelled “Business PPI”, but tended to use their own their own naming conventions depending on the underlying banking product that the PPI policy was attached to. So Lloyds Bank and HSBC Bank could call Business PPI two entirely different things. Common naming conventions used by banks include “PPI”, “Business PPI”, “Commercial PPI”, “Business Loan Repayment Insurance”, “Commercial Overdraft Repayment Insurance”. Although Business PPI was sold alongside loans, mortgages, credit cards and overdrafts; the most popular forms of Business PPI related to loans and overdrafts, which is described in more detail below.
Business PPI Relating to Loans
This type of Business PPI was often called ‘Business Loan Repayment Insurance’ (or “BLRI”). BLRI was typically sold alongside commercial bank loans, or business banking loans such as a Variable Rate Business Loans, Fixed Rate Business Loans, Treasury or Sterling Loans. This type of insurance was used to cover the named person(s) on the policy for accident, illness, and death.
Many BLRI policies were added to the business loan without the businesses prior knowledge or consent. In other cases, the bank may have led the business to believe that in order to take out the loan, Business Loan Repayment Insurance was required. This may have been presented as a condition of the loan by the banks’ Relationship Manager or Treasury specialist when in actual fact it was never a condition of the loan at all.
If your business has taken out a PPI policy relating to a loan, it may be that you have been mis-sold the policy. There are certain key things to look out for if you suspect that this is the case, such as:
- Your bank did not make it clear that Business Loan Repayment Insurance was not a condition of the business loan, but rather an optional extra to the loan that you didn’t need to take
- Your bank added Business Loan Repayment Insurance to your business loan without your consent or knowledge
- You felt pressurized by your bank to take out Business Loan Repayment Insurance
- The cost of Business Loan Repayment Insurance was not properly explained to you at the point of sale of the loan
- Any policy exclusions or limitations of the Business Loan Repayment Insurance were not properly explained to you at the point of sale of the loan
- The suitability of the Business Loan Repayment Insurance was not properly assessed by your bank prior to the policy being sold
- Your bank did not properly explain to you that your business had to operate from the United Kingdom to be eligible for the policy
- Your bank did not properly explain to you that if you cancelled the Business Loan Repayment Insurance, or if you repaid your business loan early; then you might be entitled to a partial refund of the policy premiums
If any of these indications of mis-sp
elling resonate with you, then there is every chance that you may have been mis-sold your Business Loan Repayment Insurance policy and you should make a claim if you would like to receive compensation.
Business PPI Relating to Overdrafts
Commercial Overdraft Repayment Insurance (CORI) is a form of Business PPI that applies to business banking overdrafts.
Businesses that required overdraft facilities from their bank may have been incorrectly told or misled that they needed to take out CORI in order to be granted the overdraft in the first place. In effect, this left the business with no other option than to take out a CORI policy.
Similar to BLRI, the features of the CORI policy may not have been fully explained by the bank at the point of sale. In other instances of mis-selling, an automatic monthly direct debit may have been deducted from the business account without the business knowing what this payment was for.
Some indicators to look for if you suspect that you have been mis-sold a Commercial Overdraft Repayment Insurance policy include:
- Whether the costs of the PPI policy were properly explained to you at the point of sale
- Whether the Commercial Overdraft Repayment Insurance policy was optional to the overdraft facility itself
- Whether it was properly explained to you that your business had to operate from the United Kingdom to be eligible for the Commercial Overdraft Repayment Insurance policy
- Whether it was properly explained to you that the Commercial Overdraft Repayment Insurance policy would incur interest throughout the life of the overdraft
If any of these potential indications of mis-selling resonate with you, then there is every chance that you may have been mis-sold your Commercial Overdraft Repayment Insurance policy and you should make a claim if you would like to receive compensation.