Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

'We've spent £10,000 on invalid virus insurance'

"It's a bit galling to realise... we've spent more than £10,000 on insurance which wasn't valid," says Nigel Manton, of the Fresh Skin Clinic, in Cheshire.

His firm is one of hundreds that say they were wrongly denied cover for the virus and could go bust as a result.

A court case to decide whether many businesses receive insurance payouts for damage caused to them by the pandemic begins on Monday.

However, insurers say most business policies simply do not cover pandemics.

A judge will decide on the correct interpretation of 17 so-called business interruption policies, but the ruling could affect up to 370,000 firms.

"All businesses thought they'd inoculated themselves by buying this insurance and they have found that this financial vaccine doesn't work," says Mr Manton.


How did we get here?

Following the lockdown, a host of businesses had to close their doors and many looked to insurers to cover their losses through their business interruption policies.

However, many insurers disputed these claims, arguing that such policies were never intended for losses caused by unprecedented measures such as government-imposed lockdowns.

About 400 companies have complained to the financial ombudsman, prompting City regulator the Financial Conduct Authority (FCA) to bring this case.

It has selected 17 examples from business interruption insurance policies used by 16 insurers, eight of whom were asked to take part in the court case.

These include Hiscox, RSA Group, Arch Insurance, Argenta, Ecclesiastical, MS Amlin, QBE and Zurich, all of whom agreed to take part voluntarily.

The FCA says the case will provide "clarity and certainty for everyone involved in these business interruption disputes, policyholder and insurer alike".


What do affected businesses say?

The views of Mr Manton are echoed by the many businesses who've contacted the BBC over the past few months to express frustration that their business interruption insurance wouldn't pay out.

After all, their business was indeed interrupted by the coronavirus pandemic, as the lockdown stopped them from using their premises, for example.

Now many are crossing their fingers that the results of this case will mean their policies could pay out in future as many are - in the words of the FCA - "under intense financial strain".

Simon Ager told the BBC his climbing company was at risk of being bankrupted because his insurer Hiscox was refusing to cover losses.

According to his policy, the insurer should cover financial losses for any business unable to use their premises following "an occurrence of any human infectious or human contagious disease, an outbreak of which must be notified to the local authority".

However, citing a separate clause, Hiscox argues that the policy was intended to cover incidents that occur only within a mile of a business

Mr Ager is now part of the Hiscox Action Group, 369 of whose members are owed £47m in uncovered losses. They will give evidence in this week's case and have begun a separate arbitration claim against the insurer.

Richard Leedham, a senior partner at law firm Mishcon de Reya, which represents the group, said: "We can shed additional light on the matter and explain exactly why these policies should pay out and show the damage this refusal is doing to hundreds if not thousands of British businesses."


What do the insurers say?

The Association of British Insurers says most business policies do not cover pandemics, as the level of risk involved would make premiums unaffordable. Instead the majority focus on property damage.

Huw Evans, director general of the ABI, told the BBC: "This is not a debate about whether these policies were intended to cover pandemics, it is a debate as to whether the wordings of these policies inadvertently cover pandemics.

"It is an argument about whether the wording allows insurers to decline the claim."

In June, Hiscox said it recognised businesses faced "extremely difficult times" and was committed to "seeking expedited resolution of any contract dispute".

RSA Group said it continued to "treat claims in line with legal advice, precedent and case law".

The FCA has said the 17 policies under review in the case are only a "representative sample" and that the test case would provide guidance for the interpretation of "many other" business interruption policies.

However, it has also said all along that most small business insurance policies will only focus on property damage and only have basic cover for business interruption.

As such, it believes "in the majority of cases, insurers are not obliged to pay out in relation to the coronavirus pandemic" and this court case will only focus on the "remainder of policies that could be argued to include cover".

The trial is expected to take eight days.

AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
Spain and Morocco Trade Blame After 72,000 Migrants Enter Ceuta
AI Is Remaking the US Economy, From GDP Growth to iPhone Prices
Europe’s Heat and Drought Are Now Disrupting Power, Shipping and Tourism
Europe’s Drying Rivers Trigger Power Cuts, Factory Shutdowns and Wildfire Emergencies
Record-Low Danube Forces Nuclear Cuts and Emergency Power Curbs
Danube Drought Forces Hungary’s Paks Nuclear Plant Into Full Shutdown
Ceuta Death Toll Rises as Spain and Europe Clash Over Border Response
Valued at $109 Million: F-35B Fighter Jet Crashes in Southern California
Record-Low Danube Exposes Probable Mammoth Remains in Bulgaria
US Says It Has Carried Out Heavy Strikes on Iran After Attempted Attacks on Its Forces
The AI User Nightmare: Private Claude Conversations Leaked to the Internet
Over 24 Hours in the Air: Qantas Airbus Completes Record-Breaking Test Flight
Massive Wildfires Ravage Southern Europe: Fatalities in Greece and Evacuations Across France, Spain, and Turkey
Nvidia Reportedly Takes Vast Texas Data-Centre Lease to Underwrite AI Expansion
FIFA’s Private-Investment Plan for World Cup Rights Draws European Revolt
Apple Briefly Crosses Five Trillion Dollar Valuation as Investors Retreat From AI Bets
Fresh Heatwave Threatens to Rekindle France’s Historic Wildfire Crisis
Following OpenAI's Cyberattack: 'Most Companies Still Do Not Understand What Is Coming'
OpenAI Sued After ChatGPT Allegedly Discouraged Emergency Care Before Near-Fatal Embolism
Miliband Sets Climate and International Law at Centre of UK Diplomacy
Czech Central Bank Governor Rejects Early Euro Entry and Rate-Cut Pressure
Trump Readies New Tariffs as Temporary Global Levy Nears Expiry
Vivienne Westwood Casts Cicciolina, 74, in Its New Autumn Campaign
Dejavu: Germany’s Military Expansion Reshapes Europe’s Strategic Balance With France
Morgan Stanley Builds a Wall Street Lead in AI Infrastructure Finance
High Prices Push Coffee Drinkers Toward Whole Beans and Home Brewing
Trump Draws Boos and Podium Scrutiny at Spain’s World Cup Triumph
Brilliant move: Péter Magyar Moves to Nominate Chess Grandmaster Judit Polgár as Hungary’s President
Spain Defeats Argentina in Extra Time to Win Second World Cup
Current AI Seeks to Build an Open Global AI Infrastructure Outside Big Tech Control
Germany’s Economic Malaise Reopens the Sunday Shopping Debate
Proposed U.S.-Saudi Nuclear Pact Could Permit Limited Uranium Enrichment Under International Safeguards
Netherlands Declares Water Shortage Emergency After Drought Pushes Rivers to Historic Lows
Why Kentucky Fried Chicken Became KFC—and Why the False Explanations Persist
Ukrainian Drones Strike Wildberries Warehouses Deep Inside Russia
Reported CIA Mission Helped Clear the UAE’s Path to Advanced US AI Chips
Artificial Intelligence Capital Fuels Markets While Governments and Regulators Face Mounting Strategic Tests
China’s Moonshot’s Kimi K3 Narrows the Gap With Anthropic Through Scale, Openness and Lower Cost
The Ledger Will Not Trust on Faith
Trump Administration Pressures Banks to Restrict Financial Access for Undocumented Immigrants
Passenger Bound for Germany Refused to Sit Beside a Woman on a Plane — Then Slapped a Flight Attendant
Ukraine’s Leadership Rift Spills Into the Streets as Protesters Target Army Chief
Ukrainian Drone Barrage Kills Eight and Strikes Russian Logistics Network
The Ten World Cup Finals That Defined Football History
Smartphones Are Getting More Expensive, Sales Are Collapsing, and Even Apple Admits: "Prices Will Rise"
The Monaco Bombing Has Become a Test of Ukraine’s Intelligence Accountability
Leadership Change and Strategic Rivalry Redraw the Political Map
The AI Race Enters Its Infrastructure Era
Britain Nationalises British Steel to Protect Scunthorpe Production and Strategic Supply
French National Assembly Overrides Senate to Pass Historic Assisted-Dying Legislation
×