April 23, 2020 / 12:36 PM / 3 months ago

Shuttered businesses appoint lawyers to take on UK insurer Hiscox

LONDON (Reuters) - Hundreds of British businesses, shuttered by a government lockdown to curb the coronavirus pandemic, have appointed lawyers to take on insurer Hiscox (HSX.L), saying its refusal to compensate them for losses was putting their future at risk.

The Hiscox Action Group said on Thursday it represented more than 200 policyholders with “dozens more joining daily”, that discussions with a litigation funder were advanced and that it had appointed Mishcon de Reya as legal adviser.

Richard Leedham, a partner at Mishcon de Reya, said he had been instructed to prevent hundreds of British companies from being driven out of business and had been “very surprised” by Hiscox’s reaction to date.

The dispute hinges on whether the government lockdown and the coronavirus are enough to trigger Hiscox’s business interruption insurance, designed for insured premises that cannot be used because of restrictions imposed by a public authority and in the event of a notifiable disease or infection.

The action group said many businesses would take their claims to the Ombudsman, a service that handles such disputes, while others would seek to use arbitration or litigation if that failed. 

Hiscox, a leading insurer of small businesses, said it was focused on helping provide customers with greater certainty, that a fair and fast resolution was in everybody’s interests and that it would work with the insurance industry, regulators and customers to seek resolutions.

“We understand these are incredibly difficult times for businesses and we are paying claims that are covered by the policies we issue fairly and quickly,” it said in a statement.

“We review every case individually, and if any customer has concerns about the application of their policy, we encourage them to get in touch with us directly.”

In a statement last week, the insurer said: “General business interruption policies across the industry, including Hiscox’s, were not designed to cover the extraordinary circumstances caused by this pandemic.”

A second, unconnected Hiscox Action Group has appointed law firm Edwin Coe and said it had signed up 30 potential claimants. Lawyers at Edwin Coe did not respond to a request for comment.

A third group, the Night Time Industries Association (NTIA), said it had around 100 Hiscox claimants among the bars, nightclubs, restaurants, festival and live music event operators that it represents. The association said it had instructed barrister Philip Kolvin to advise on members’ rights.

The NTIA, which says it accounts for almost 8% of British employment and 66 billion pounds ($81 billion) of annual revenue, was not immediately available for comment, while Kolvin declined to comment.

Reporting by Kirstin Ridley and Carolyn Cohn; editing by Nick Macfie and Pravin Char

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