Covering Covid
The Financial Conduct Authority “struck a potential blow for the little guy” on International Workers’ Day last week, said Lex in the FT. Amid concerns the insurance industry is dodging paying out on claims for “business-interruption insurance”, the watchdog plans to put a test case through the courts to provide some clarity for policyholders and insurers. “A revolt by clients has shone an unflattering light on the UK-listed insurer Hiscox in recent weeks”: some 300 policyholders are taking the company to court in a class-action suit. But the legal review will also consider business-interruption policies underwritten by Axa, Touchstone and Zurich.
Disputes typically centre on ambiguous wording, said Will Kirkman on ThisIsMoney.co.uk. According to Ashwin Mistry of broking group Brokerbility, the fault lies with insurers who have “deliberately broadened” the policy wordings around businessinterruption insurance over the years “to attract more business”. Now that is coming back to bite. “My fear is these class actions will take 12 to 18 months minimum.” Meanwhile, the situation is becoming farcical. When one wedding venue, Beaconside House in Devon, joined a class action against insurer RSA for refusing to pay out on a claim, proprietor Mark Singer was astonished to learn that RSA “was preparing to sue him” on behalf of a couple whose wedding had been cancelled. “It’s unbelievable. I fell off my chair.”