Hiscox should begin making interim payments under business interruption policies after the Financial Conduct Authority’s (FCA) test case was decided in favour of policyholders, broker NDML and trade body the Night Time Industries Association (NTIA) have urged.
NDML managing director Simon Mabb and NTIA chief executive officer Michael Kill urged Hiscox in a joint open letter to pay 50% of each Covid-19 claim on business interruption policies immediately and a further 25% on 1 December for claims that have not yet settled by that date.
Hiscox was among eight insurers whose business interruption policies were the subject of the FCA’s case to test the legality of rejections of Covid-19 claims following the implementation of lockdown in March.
NTIA, whose members include independent bar, nightclub and restaurant owners, pubs, and festival and live music event operators, all hit particularly hard by Covid-19 restrictions, did not intervene in the FCA’s test case.
Instead, the trade body was advised to wait and see how the FCA’s test case panned out. “[The legal advice NTIA received] was that Hiscox was obviously liable under the policy, that Hiscox’s arguments regarding business trends would be rejected and that the FCA would win its case, so there was no need for our members and clients to seek to intervene. So it has proved.”
Mabb and Kill warned Hiscox that the rights of clients and members “are reserved in relation to damages for late payment”, and invited the insurer to join a roundtable “to discuss the rapid assessment and payment of these claims”.
Hiscox said on 15 September that it was “assessing the judgment in detail to ascertain how the court’s conclusions should be applied to the claims and circumstances of individual Hiscox policyholders. Any issues not addressed by the judgment will be assessed on a case-by-case basis as part of the normal insurance loss adjustment process for claims.”
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