It is a difficult time for all business in Britain now. The coronavirus health pandemic that the nation is battling against has forced the majority of businesses to shut their doors to prevent further spreads of the virus. Many businesses have turned to their business interruption cover to support them through these challenging times, only to be faced with claims being rejected! Legal action is being pursued against many of Britain’s leading insurance companies for rejecting claims that are seeking a payout for legitimate business interruption circumstances.
Hiscox is in the front line of the controversy after selling business interruption policies prior to the Coronavirus pandemic; which clearly stated that it would pay out for a notifiable disease that forced a business to close. Many business owners have submitted claims to their insurers, and in response are being informed that their policies do not cover health pandemics.
Hiscox stated that it has approximately 10,000 companies which had purchased its business interruption insurance cover that had been forced to close due to government ruling. One company, who are planning to sue Hiscox, said that they bought their policy as it is designed to protect them when they are unable to use their premises. One of the reasons included in their policy was restrictions imposed by public authority, following an occurrence of a human infection or human contagion disease (an outbreak of which must be notified). Despite this wording seeming like the exact circumstances that Britain currently faces, Hiscox state that the current pandemic is not an occurrence, causing the claim to be rejected.
Business interruption insurance policies typically pay out a maximum of £100,000 to claimants to cover the losses to their business to help their business survive. The Financial Conduct Authority has told insurers that they must treat their customers fairly during the current circumstances. However, there has not been any reports of insurers paying out for these types of claims. Hiscox advised that their business interruption policy was not designed for these extraordinary circumstances as it is simply too large to cover.