A group of Hiscox policyholders angry at the insurance giant’s decision to exclude coronavirus-related disruptions from its business interruption policies have been given the go-ahead to launch legal action against the firm.
According to law firm Mishcon de Reya, over 400 policyholders with nearly £40m in claims have joined the Hiscox Action Group.
The law firm is expected to launch an “expedited arbitration claim” against Hiscox in the coming days.
It has advised members of the group that they have a “good chance” of success in the action.
On 22 April, the insurer issued a statement saying that like other firms, Hiscox’s core commercial support packages “do not provide cover for business interruption as a result of the general measures taken by the UK government in response to a pandemic”.
The decision prompted policyholders to band together to seek remuneration from the company.
Harbour, the group’s litigation funder, has agreed to fund the case through whatever legal steps are considered necessary.
Simon Ager, one of the group’s members, said: “Everyone has been working really hard to move this claim forward.
“For many of our members, this insurance is the difference between survival and bankruptcy, and we are determined that they should get the money they are entitled to as soon as possible”.
Mishcon de Reya’’s lawyers have also suggested that the group may be able to pursue their claim through the Enterprise Act.
The act allows for substantial additional claims to be made against insurers who unreasonably drag their feet on payment, and Hiscox behaviour may well have triggered these provisions, the firm said.
Daniel Duckett, who is on the group’s steering committee, added: “Many of our members have lost out because Hiscox has refused to pay out and forced us to go to these extraordinary lengths to get settlement.
“The insurance provisions of the Enterprise Act will mean we can now not only recoup the money we are entitled to but also get significant extra payments to compensate us for our additional losses”.
A spokesperson for Hiscox said: “We understand these are difficult times for businesses and we are paying claims that are covered by the policies we issue fairly and quickly.
“As the FCA has said most UK small business policies across the industry do not cover pandemics.”