(Reuters) – Small businesses, from restaurants to nightclubs and wedding planners to beauty salons, won the right to insurance payments on Friday after the UK Supreme Court ruled that their policies would cover losses caused by coronavirus lockouts.
Six of the world's largest commercial insurance companies – Hiscox Ltd., RSA Insurance Group PLC, QBE Insurance Group Ltd., Argenta Holdings Ltd., Arch Insurance Group Inc. and MS Amlin PLC – accused many business interruption policies did not cover extensive disruptions after Britain's first national suspension
However, the United Kingdom Supreme Court rejected insurers' appeals after examining non-life insurance clauses ̵
Alistair Handyside, Executive Director of the Professional Association of Self-Caterers UK, whose members had a policy with the RSA, said he was very happy with a ruling that would mean survival for many in the middle of a third suspension.
But policyholders are now stepping up for the next stage in their fight for payments.
"It seems like we won a new battle this morning ten months late," said Murray Pulman, who runs The Posh Partridge Café in Dorchester, southwest England.
"However, the war is not over," he said. "Getting paid, compensation and costs … is another whole new struggle starting today."
Hiscox shares seesaw
Hiscox, MS Amlin, Argenta and RSA said they would pay claims as soon as possible. Other insurers were not immediately available for comment. Hiscox estimated that the COVID-19 estimate for business interruptions for 2020 had increased by $ 48 million net after reinsurance, bringing the total receivables to £ 136 million ($ 185.52 million). traded 2.6% higher before 1250 GMT.
The UK Financial Conduct Authority (FCA) said they would work with the industry to ensure they settled claims quickly and made interim payments if possible.
The case activated interruption policy with clauses offering protection when insured premises cannot be reached due to public authority restrictions, in the event of a notifiable disease within a specified radius and hybrid formulations.
Insurers said they paid valid claims but could not provide unlimited coverage for losses when almost the entire economy was shut down and healthy people sent to their homes in the strictest restrictions on public life since World War II.
The London Supreme Court ruled in September last year that some insurers had wrongly denied protection, prompting six insurers, the FCA and Hiscox Action Group, to question parts of the decision they had lost in an appeal against the Court of Appeal. its critical nature.
Christopher Croft, president of the insurance brokers' association LIIBA, said that the industry's reputation had been damaged. "We have to think hard about how to fix it," he said.
More insurance and risk management news about the coronavirus crisis here . Catalog