Hiscox Action Group says refusing to pay COVID-19 BI claims 'disgraceful' as it prepares for legal battle

The Hiscox Action Group, a group representing over 200 policyholders in  dispute with the Hiscox over COVID-19 related compensation claims, has appointed a London-based law firm to handle its legal battle with the insurer. The group claims that "Hiscox is putting the future of hundreds of British businesses at risk" in a "disgraceful" attempt to preserve its own balance sheet.

The group has hired Mishcon de Reya as its legal counsel, and is in advanced talks with a litigation funder to underwrite its legal cost.

The group wants the insurer to "honour its business interruption insurance" claims obligation for a policy that stated that it will cover the financial losses caused by the "inability to use the insured premises due to restrictions imposed by a public authority" and/or "an occurance of any human infectious or human contagion disease".

Mishcon de Reya partner Richard Leedham said: “We are very excited to be involved in this claim and have been very surprised by Hiscox’s reaction to date. Our instructions are to pursue all claims as vigorously as possible to prevent hundreds of good British companies from being driven out of business.”

Simon Ager of the Pinnacle Climbing Centre and a steering member of the action group, described Hiscox's behaviour as "disgraceful", saying that "the policy wording is clear and unambiguous, and the insurance has clearly been triggered. In refusing to pay out in a shoddy attempt to preserve its own balance sheet, Hiscox is putting the future of hundreds of British businesses at risk".

The carrier had earlier said that its core policy wordings do not provide cover for business interruption caused due to the UK government mandated lockdown.

Media Zoo's Mark Killic, also a steering group member commented: "Hiscox thought they could get away without paying but that is not going to happen. We have appointed top legal counsel, we will be fully funded and we are going to force Hiscox to do the right thing and honour its obligations".

The action group is expecting more businesses to sign up in the coming weeks.

Earlier last week, Hiscox agreed to expedite resolution in collaboration with the industry and regulators in response to the " market speculations" over non-payment of business interruption insurance claims. The company admitted that a number of UK policyholders have disputed the application of their BI policy.

"Hiscox recognises these are extremely difficult times for businesses and is determined to help provide greater certainty for customers," the company said in April 22 statement. "As a priority it will therefore work with the UK insurance industry, its regulators and its customers to seek means of expediting resolution through the range of independent mechanisms available."

Hiscox is expecting to pay net claims of up to $175 million arising from the disruption caused by restrictions on travel and mass gatherings due to the COVID-19 pandemic.