(Reuters) – Insurers are trying to avoid liability for pandemic-related business losses with counter-intuitive arguments that run counter to the essential purpose of insurance, the UK's market watchdog told the British Supreme Court on Tuesday.
A lawyer for the Financial Conduct Authority (FCA), which brought a test case against insurers on behalf of policyholders, said that insurers had reached an "extraordinary conclusion" that business losses were largely detected during the coronavirus pandemic due to the extensive devastation it has caused.  "(Insurer) says:" We insure dangers but not those that will cost us a huge amount of money. We never considered it. & # 39; Well, that's not an answer, "said Colin Edelman, the FCA's lawyer, on the second day of a four-day appeal, watched by thousands of companies kneeling during the pandemic.
Small business from cottage business. to restaurants and nightclubs had to shut down or restrict trade after government-ordered lockdowns and say they face ruin after insurers rejected claims for business interruptions.
The case concerns 21
The wording covers business interruptions when insured premises cannot be reached due to public authority restrictions, in the event of a notifiable disease within a specified radius and hybrid wording.
Tuesday's hearing focused on how the insurance law's clauses, such as a so – called "but for" test, illness, compound peri l, prevention of access and trends, should be applied in the case.
A lower court in September ruled largely in favor of the FCA and Hiscox Action Group, a group of policyholders representing hundreds of policyholders who have joined the trial. , when judges ruled that certain insurers were wrong in rejecting claims.
But the FCA, the action group and six insurers – Arch, Argenta, Hiscox, MS Amlin, RSA and QBE – are all challenging elements in the decision they lost. Insurers, who have said they pay valid claims, claim that most insurance or "access prevention" clauses in insurance do not cover pandemics and that all payments should reflect the broader economic downturn caused by the coronavirus. ] "An expansionist approach to the construction of insurance clauses is … not an appropriate or principled solution," said John Lockey, a lawyer representing Arch, at the hearing.
Jonathan Gaisman, a lawyer for Hiscox, said that the prevention of ace clauses was designed only to shut down a public authority in situations specific to a business premises, such as the presence of rats or mice, food poisoning or drainage problems, as well as certain diseases. .
"Locks in the case of a worldwide pandemic are completely different," he said.
More news about insurance and risk management about the coronavirus crisis here.