Hiscox BI row Rumbles on

It is reported that hundreds of commercial policyholders are heading for lawyers in an effort to obtain payments from insurer Hiscox as the dispute over its policy coverage continues.

The Night Time Industries Association (NTIA) revealed it has instructed a leading leisure barrister to take action on behalf of a large number of its members over the insurer’s alleged refusal to pay claims they believe are valid.

The NTIA said it had instructed Philip Kolvin QC to lead the case adding that the lawyer believes that the chances of success are high, given the policy wording around cover for the forced closure of premises due to human disease.

CEO of NTIA, Michael Kill, said: “Night time economy businesses are being denied legitimate insurance claims, many claims are being disputed by insurers based on contrived arguments to avoid sharing the financial burden during the Covid-19 crisis.

“We have instructed Philip Kolvin QC, the leading industry barrister, to advise on our members’ rights under their insurance policies. One of the main leisure sector policies was underwritten by Hiscox Insurance, who have written to their clients denying liability. Philip Kolvin QC has advised that claimants who were insured by Hiscox against closure by public authorities and who had to close their premises under the regulations have a good case against Hiscox.”

The association has also called on other firms in the hospitality and leisure sector to join the action.

Mr Kolvin, of Cornerstone Barristers added: “Leisure operators are suffering severe hardship. There is a clear and present danger that the industry will be decimated, that leisure businesses throughout the UK will go to the wall, that jobs and livelihoods will be lost, and that the cultural capacity of the nation will be depleted for years to come.

“We should celebrate that the Night Time Industries Association has stepped up to the plate to support the sector. It is time now for those insurance companies who know they are liable under their policies do the same. The clue is in the name ‘insurance’. It is what they are in business for. They should not be running for cover. They will never be forgiven for doing so.”

It comes as reports suggest high profile chef Raymond Blanc has consulted lawyers over a potential claim against Hiscox in a dispute around the coverage of the restaurant chain’s business interruption policy.

Hiscox issued a statement yesterday which said it was seeking to settle all valid claims.

“Hiscox is actively settling claims for event cancellation and abandonment, media and entertainment and other segments including travel,” it said. “On the basis that disruption caused by restrictions on travel and mass gatherings continues for a six month period from March 2020, Hiscox expects to pay net claims totalling up to $150 million. In the event that restrictions on travel and mass gatherings are extended beyond six months, Hiscox expects that these claims could increase by an additional $25 million.

“Hiscox is also receiving claims as a result of economic losses following government action to stop the spread of COVID-19. Like others in the industry, Hiscox UK’s core small commercial package policies do not provide cover for business interruption as a result of the general measures taken by the UK government in response to a pandemic.

“As described in its announcement on 15 April, Hiscox UK has approximately 10,000 customers that purchased cover for business interruption and have been directly impacted by mandated government premises closure to stop the spread of COVID-19. Over 70% of these customers have monthly revenues of less than £40,000 in a normal trading environment, with a significant proportion below £10,000 per month. The level of economic loss experienced is likely to be materially lower than reported revenues.”

It continued: “A number of UK policyholders have disputed the application of their policy in relation to business interruption. Hiscox recognises these are extremely difficult times for businesses and is determined to help provide greater certainty for customers. As a priority it will therefore work with the UK insurance industry, its regulators and its customers to seek means of expediting resolution through the range of independent mechanisms available.”

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