Hiscox set to face legal action over BI claims refusal

No comments

The Night Time Industries Association has announced that it will be coordinating claims against Hiscox for its refusal to pay out under its business interruption policy

Hiscox is set to face a wave of legal action over its decision to decline coronavirus claims on their business interruption policies.

The news comes after the Night Time Industries Association (NTIA) announced it would be coordinating claims against the insurer after receiving legal advice for a leading industry barrister.

“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,” NTIA chief executive Michael Kill said. “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.”

Kill said the association wanted to hear from any businesses within the hospitality and leisure  sector that have a policy with Hiscox and would like to pursue legal action, with more than 100 claimants having already joined the group taking action against Hiscox.

Philip Kolvin QC of Cornerstone Barristers, who has been instructed to start the legal action, said that the night time leisure industry faces a “clear and present danger” in the wake of the coronavirus pandemic, and warned that insurers will “never be forgiven” if they refuse claims and fail to support their customers.

“Leisure operators are suffering severe hardship,” he said. “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.”

NDML Insurance managing director Simon Mabb said the legal action represented a call on all insurers to do the right thing.

“As brokers, we are working with NTIA and Philip Kolvin QC in representing our clients in pursuing their claims for business interruption losses due to the covid-19 lockdown,” he said. “We are exploring every possible avenue to get insurers moving and paying legitimate claims to their clients.

“So, this is a direct call to certain insurers to do the right thing now, even though times are hard. Now is the time to work together. Not to find loopholes and re-write wordings that exclude claims. But to stand by the clients that have stood by you for so many years, to recognise that loyalty. And to save our industry.”

The insurer has also faced criticism from Brasserie Bar Co, which employs 1,400 staff and has french celebrity chef Raymond Blanc as its chef patron after the chain was forced to close 37 premises after Hiscox declined its business interruption claim.

A spokesperson for Hiscox told Insurance Times: “We understand these are incredibly difficult times for businesses and we are paying claims that are covered by the policies we issue fairly and quickly. We review every case individually, and if any customer has concerns about the application of their policy, we encourage them to get in touch with us directly.”