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
Vatican hosts first Catholic LGBTQ pilgrimage
Apple Unveils iPhone 17 Series, iPhone Air, Apple Watch 11 and More at 'Awe Dropping' Event
France joins Eurozone’s ‘periphery’ as turmoil deepens, say investors
France Faces New Political Crisis, again, as Prime Minister Bayrou Pushed Out
Nayib Bukele Points Out Belgian Hypocrisy as Brussels Considers Sending Army into the Streets
France, at an Impasse, Heads Toward Another Government Collapse
The Country That Got Too Rich? Public Spending Dominates Norway Election
EU Proposes Phasing Out Russian Oil and Gas by End of 2027 to End Energy Dependence
More Than 150,000 Followers for a Fictional Character: The New Influencers Are AI Creations
EU Prepares for War
Trump Threatens Retaliatory Tariffs After EU Imposes €2.95 Billion Fine on Google
Tesla Board Proposes Unprecedented One-Trillion-Dollar Performance Package for Elon Musk
Gold Could Reach Nearly $5,000 if Fed Independence Is Undermined, Goldman Sachs Warns
Uruguay, Colombia and Paraguay Secure Places at 2026 World Cup
Trump Administration Advances Plans to Rebrand Pentagon as Department of War Instead of the Fake Term Department of Defense
Big Tech Executives Laud Trump at White House Dinner, Unveil Massive U.S. Investments
Tether Expands into Gold Sector with Profit-Driven Diversification
‘Looks Like a Wig’: Online Users Express Concern Over Kate Middleton
Florida’s Vaccine Revolution: DeSantis Declares War on Mandates
Trump’s New War – and the ‘Drug Tyrant’ Fearing Invasion: ‘1,200 Missiles Aimed at Us’
"The Situation Has Never Been This Bad": The Fall of PepsiCo
At the Parade in China: Laser Weapons, 'Eagle Strike,' and a Missile Capable of 'Striking Anywhere in the World'
The Fashion Designer Who Became an Italian Symbol: Giorgio Armani Has Died at 91
Putin Celebrates ‘Unprecedentedly High’ Ties with China as Gazprom Seals Power of Siberia-2 Deal
China Unveils New Weapons in Grand Military Parade as Xi Hosts Putin and Kim
Rapper Cardi B Cleared of Liability in Los Angeles Civil Assault Trial
Google Avoids Break-Up in U.S. Antitrust Case as Stocks Rise
Couple celebrates 80th wedding anniversary at assisted living facility in Lancaster
Information Warfare in the Age of AI: How Language Models Become Targets and Tools
The White House on LinkedIn Has Changed Their Profile Picture to Donald Trump
"Insulted the Prophet Muhammad": Woman Burned Alive by Angry Mob in Niger State, Nigeria
Trump Responds to Death Rumors – Announces 'Missile City'
Druzhba Pipeline Incident Sparks Geopolitical Tensions
Cost of Opposition Leader Péter Magyar's Economic Plan Revealed
Germany in Turmoil: Ukrainian Teenage Girl Pushed to Death by Illegal Iraqi Migrant
United Krack down on human rights: Graham Linehan Arrested at Heathrow Over Three X Posts, Hospitalised, Released on Bail with Posting Ban
Asian and Middle Eastern Investors Avoid US Markets
Ray Dalio Warns of US Shift to Autocracy
Eurozone Inflation Rises to 2.1% in August
Russia and China Sign New Gas Pipeline Deal
Von der Leyen's Plane Hit by Suspected Russian GPS Interference in an Incident Believed to Be Caused by Russia or by Pro-Peace or by Anti-Corruption European Activists
China's Robotics Industry Fuels Export Surge
Suntory Chairman Resigns After Police Probe
Gold Price Hits New All-Time Record
UK Fintechs Explore Buying US Banks
Greece Suspends 5% of Schools as Birth Rate Drops
Apollo to Launch $5 Billion Sports Investment Vehicle
Bolsonaro Trial Nears Close Amid US-Brazil Tension
European Banks Push for Lower Cross-Border Barriers
Poland's Offshore Wind Sector Attracts Investors
×