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13 May 2020 / Chavah Apfelbaum
Issue: 7886 / Categories: Opinion , Covid-19 , Insurance / reinsurance
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Taking cover

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20592
Could the COVID-19 class action against Hiscox be successful, asks Chavah Apfelbaum

Hiscox Action Group and the Night Time Industries Association have threatened to bring a class/collective action against Hiscox for refusing to pay out business interruption claims arising from disruption caused by COVID-19. The groups collectively represent more than 500 Hiscox policyholders with insurance cover of over £50m.

Given the UK’s national shutdown in response to the COVID-19 pandemic and the sheer volume of related claims, estimated to cost in excess of £1bn, insurers will be resistant to pay out. The outcome of this class action will set a precedent for future lawsuits against insurers in the wake of COVID-19.

What is covered?

Will the policy cover the effects of a pandemic and losses caused by the national lockdown? The relevant standard Hiscox policy appears to state that policyholders are insured for financial losses resulting from:

  • an interruption to business caused by inability to use the insured premises due to restrictions imposed by a public authority during the period of insurance following
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