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Client update: Business Interruption cover amidst the COVID-19 pandemic

In the past few days the Financial Conduct Authority (FCA) have extended the scope of the legal proceedings to cover a total of 91 policy types and 19 Business Interruption (BI) policy wordings, which it could place before a court to decide the validity of BI claims arising from Covid-19. Hiscox remains the insurer with the highest number of policy wordings affected at 41 and Ecclesiastical is the next highest with a total of 12. The regulator has pointed out that their list is “not exhaustive” and that it expects to publish an updated list, of all relevant insurers and wordings that may be impacted by the test case, in early July 2020. Details of the policy wordings, insurers and timetable are available on the FCA website

Hiscox Action Group (HAG), reportedly made up of some 200 members, launched their own independent (of the FCA) legal action back in April 2020. On the 15th June 2020 Mishcon de Reya, the law firm representing HAG, formally wrote to Hiscox, in order serve notice on an arbitration claim for non-payment of BI claims allegedly totalling almost £40m. According to the group this action triggers the Arbitration clause for nearly 350 policyholders. HAG apparently wants a former Court of appeal Judge to act as sole arbitrator on their dispute.

Clearly these disputes are an ongoing and evolving process and we will do our upmost to keep you informed of any significant developments. If in the meantime you have any questions with regards to the information provided, please do not hesitate to contact us.

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