Hiscox Insurance has been the subject of increasing criticism following its refusal to pay out on a series of apparently valid COVID 19 claims. A letter has been sent to the Secretary of State for Business, Alok Sharma, urging him to investigate “as a matter of urgency.” Policyholders are now considering launching a class action against the insurer.
Mark Killick, of Media Zoo, one of the companies impacted, says, “The policy terms are clear and unambiguous. Hiscox refusal to pay out on legitimate insurance claims at a time like this is shocking and threatens businesses across the UK”
Hiscox Insurance, a leading UK insurer, has turned down a series of COVID 19 office closure claims even though its Business Interruption policy specifically covers this eventuality.
Hiscox deals with matter in its so-called “Public Authority” clause which says:
“We will insure for your financial loss resulting from an interruption to your activities caused by:
11) Public Authority “Your inability to use the insured premises due to restrictions imposed by a public authority during the period of insurance following:
b) an occurrence of any human infectious or human contagion disease, an outbreak of which must be notified to the local authority
Media Zoo, an award-winning film company, spent £13,425 on its Hiscox policy and particularly wanted office closure protection to insure it for any inability to access its state-of-the-art post-production area.
There are dozens of other companies with the same policy and they are now in discussion with lawyers over either an approach to the Financial Ombudsman or a class action to litigate the matter
Rachel Pendered, Media Zoo’s managing director, says, “We took out the Hiscox Business Interruption insurance believing the company would honour its obligations. To find out that it has no intention of doing so simply because it is going to be expensive is shocking”.
Media Zoo has now written to Alok Dharma MP, the Secretary of State for Business, Energy and Industrial Strategy, urging him to intervene.
The letter from Media Zoo Creative Director, Mark Killick, says, “I am writing to tell you that at least one insurance company – Hiscox Insurance – seems determined to avoid its obligations…. Hiscox is a regulated company and I would ask you to either investigate yourself or refer this matter to an appropriate regulatory authority as a matter of urgency”
It ends, “If it is the case that in the current crisis Hiscox is refusing legitimate business interruption claims simply to preserve its own capital base, it is a disgrace and one that threatens the future of dozens of decent companies across the UK”.