The Financial Ombudsman Service (FOS) has announced a series of changes to the way it handles general insurance disputes involving small businesses, following industry consultation on FOS’ terms of reference.

Coverage of certain small business broking disputes has been reinstated, and FOS’ jurisdiction will be expanded to include profit and business interruption cases.

The service’s jurisdiction over the antecedent scheme, the Insurance Brokers Dispute Facility, will also be restored, enabling FOS to deal with disputes between small businesses and brokers concerning any “general insurance policy” that is not an “excluded product”.

The FOS board has decided to defer the changes to coverage until January 1 2016 – rather than next January 1 – to give brokers time to review and arrange appropriate liability insurance.

“There is a possibility insurance brokers’ current professional indemnity insurance arrangements would not extend to such disputes,” FOS says. “It would be unrealistic to expect brokers to renegotiate these arrangements mid-term.”

Uninsured third-party motor vehicle disputes will also undergo change.

FOS’ jurisdiction will be expanded to let it consider a dispute even when an insured driver who caused the damage has failed to pay the excess.

The service will be able to make an award of up to $5000, increased from $3000 at present.