U.K. court to weigh whether insurers should pay for COVID-19-related B.I.
The Financial Conduct Authority's (FCA) business interruption case began on July 20 and will take place over a span of eight days.
Financial regulators in the United Kingdom are set to begin a test case on behalf of thousands of businesses that claim they should have been paid by insurers to cover closures during the coronavirus pandemic.
The Financial Conduct Authority’s (FCA) business interruption case began on July 20 and will take place over a span of eight days. The insurers involved in the case include Arch Insurance Limited, Argenta Syndicate Management Limited, Ecclesiastical Insurance Office Plc, Hiscox Insurance Company Limited, MS Underwriting Limited, QBE UK Limited, Royal & Sun Alliance Insurance Plc and Zurich Insurance plc.
Business interruption claims have been rampant all around the world. Insurers have mostly argued that most business interruption policies are designed to out for lost profits after a property has been physically damaged, while customers argue that a variety of subclauses in their contracts trigger payments.
This case, however, represents a rare intervention by a regulator on behalf of claimants — the first action of its kind by the FCA since it was established in 2013, according to the Guardian. The case will hopefully provide clarity for companies and insurers rather than claimants bringing individual cases at a time.
The FCA will look at 17 policy wordings from the eight different insurers and ask whether COVID-19 triggers a payout. Based on other policies that the regulator has studied, the Financial Times notes that the court’s ruling are “expected to apply to nearly 50 insurers, who sold coverage to 370,000 customers.”
Four questions that will be central to the case will look at what does denial of access mean, does COVID-19 count as an ‘incident” or “emergency”, was COVID-19 on or near the premises and how much should insurers pay.
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