In­sur­ers claim Covid guid­ance akin to five-a-day advice, court told

The Daily Telegraph - Business - - Business - By Michael O’Dwyer

IN­SUR­ERS have been crit­i­cised for com­par­ing cru­cial guid­ance to stay at home dur­ing the pan­demic to health advice en­cour­ag­ing people to eat their five-a-day, in a court­room clash over busi­ness cover.

The claims were at­tacked by lawyers for the Fi­nan­cial Con­duct Au­thor­ity watch­dog (FCA), which has launched a High Court test case against eight in­sur­ance firms over their busi­ness in­ter­rup­tion poli­cies.

Cash-strapped busi­nesses are de­mand­ing pay­outs for heavy losses suf­fered when forced to shut, but the in­sur­ers say most poli­cies were never de­signed to cover losses caused by a global pan­demic. The Govern­ment or­dered busi­nesses such as bars and restau­rants to close in March. Lawyers for the FCA at­tacked the in­sur­ers’ ar­gu­ment that many firms’ losses were not cov­ered be­cause they had al­ready shut vol­un­tar­ily af­ter the ini­tial advice for people to stay at home.

The in­sur­ers – which in­clude His­cox, RSA and Zurich – com­pared the Govern­ment’s stay-at-home guid­ance to pub­lic health cam­paigns to eat five por­tions of fruit and veg­eta­bles a day and to re­strict al­co­hol in­take to 14 units a week. On the open­ing day of the hear­ing, this ar­gu­ment was dis­missed by the FCA’s lawyer Colin Edelman QC.

Speak­ing via video con­fer­ence, he said: “In times of emergency and cri­sis the Govern­ment and the pub­lic un­der­stand the dif­fer­ence be­tween what the Govern­ment was telling them to do in March of this year and ex­hor­ta­tions to eat more fruit and veg­eta­bles.”

He said in­sur­ance poli­cies should be in­ter­preted in the con­text of the pan­demic and a so­ci­ety where people re­alise they had a social re­spon­si­bil­ity to fol­low of­fi­cial guid­ance.

Leigh-Ann Mulc­ahy QC, also for the FCA, said that by stay­ing open many busi­nesses would have bro­ken the law di­rectly by con­tra­ven­ing coro­n­avirus reg­u­la­tions. The guid­ance “made it im­prac­ti­cal for many busi­nesses to func­tion even if in law they could re­main open”, she added.

Up to 370,000 busi­nesses and more than 60 in­sur­ers could be af­fected by the out­come of the case, the court heard. The case is due to last eight days.

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