The group’s law firm has written to the insurer on behalf of 397 members

The Hiscox Action Group (HAG) has launched legal action against insurer Hiscox for rejected business interruption (BI) claims, seeking a £52m pay out for 397 group members.

The HAG is a collective of Hiscox clients whose coronavirus-related BI claims were rejected – the group now represents around 600 policyholders in total. Led by film company Media Zoo, the HAG is arguing that their claims should be paid because Hiscox’s BI policy wording insures against financial loss arising from an inability to use an insured property due to ‘an occurrence of any human infectious or human contagion disease’.

In April, the HAG appointed Mishcon de Reya as its legal representative and secured funding from dispute risk management and litigation funding firm Harbour Litigation Funding in order to progress legal action.

Today, Mishcon de Reya confirmed that it has written to Hiscox on behalf of 397 HAG members, stating that it intends to seek a £52m payment for unpaid BI claims, as well as additional claims and costs associated with the “unreasonable delay in settling these claims”.

Richard Leedham, partner at Mishcon de Reya, said: “We have written to Hiscox Insurance outlining our case and proposing an expedited arbitration process if they do not accept our claim.

“This will involve a single arbitrator and a series of test cases to determine both the responsiveness of these policies and the quantum involved.”

Simon Ager, a member of the Hiscox Action Group steering committee, added: “Our claim is for both the original sums insured and the additional costs incurred because Hiscox has dragged its feet.

“This makes it very likely that the eventual claim will be much higher than the initial £52m figure.”

According to the HAG, which formed on 3 April, Hiscox had previously told some policyholders that they would be insured for Covid-19-related closures “only to renegade on this after 23 March”.

The group has further been advised that although the FCA has started its own test case regarding BI policies linked to Covid-19, the regulator cannot impede HAG on pursuing its claim.

Daniel Duckett, a steering group member, said: “We are hearing that Hiscox Action Group members are going out of business every day. It is a scandal that Hiscox has not honoured its obligations and paid out on policies that clearly should have been triggered.”

Mark Killick, the founder of the Hiscox Action Group, added: “We have achieved a great deal in a very short space of time. But the real goal is to obtain justice and a fair settlement for all our members and we remain completely focused on delivering this outcome.”