Hiscox Insurance faces £52m legal claim for non-payment during coronavirus crisis

A £52m legal claim has been made against Hiscox Insurance after it rejected business interruption claims by businesses, including PR agency Media Zoo, affected by the coronavirus.

City law firm Mishcon de Reya has written to Hiscox Insurance on behalf of 397 members of Hiscox Action Group, which is campaigning for the claims to be paid. The group said it has "secured full funding for its legal action against Hiscox".

The letter says it intends to seek payment of £52m of unpaid business interruption claims plus “additional claims and costs” caused by the "unreasonable" delay in settling these claims.

The Hiscox Action Group said the insurer previously told some policyholders they would be covered for closures related to COVID-19, but reneged after 23 March, when the UK lockdown began.

Mishcon partner Richard Leedham said: “We have written to Hiscox Insurance outlining our case and proposing an expedited arbitration process if they do not accept our claim. This will involve a single arbitrator and a series of test cases to determine both the responsiveness of these policies and the quantum involved”.

In April, Media Zoo – which is leading comms for the Action Group – revealed Hiscox had rejected a business interruption insurance claim on the basis that “cover only applies when there is an incident within a one-mile radius of the insured building”, while warning “these types of events are simply too large and too systemic for private insurers to underwrite”.

The policy stated it covered “the inability to use the insured premise due to restrictions imposed by a public authority” that was caused by “an occurrence of a human infection or human contagion disease, an outbreak of which must be notified to the local authority”.

The Hiscox Action Group said more than 600 members have joined its ranks since the group launched on 3 April.

Media Zoo creative director Mark Killick said today: “We have achieved a great deal in a very short space of time. But the real goal is to obtain justice and a fair settlement for all our members, and we remain completely focused on delivering this outcome.”

A Hiscox spokesperson said: “We can confirm that we have received a letter on behalf of a group of policyholders with UK property insurance policies. We shall carefully consider it and respond accordingly.

"As we have said before, we do understand these are difficult times for businesses and we are paying claims that are covered by the policies we issue fairly and quickly. We also welcome all proposals to expedite resolution of any dispute, which is why we have agreed to participate in the FCA’s [Financial Conduct Authority] expedited court-based process, and we will work with all parties to achieve this.”

Have you registered with us yet?

Register now to enjoy more articles and free email bulletins

Register
Already registered?
Sign in