One business owner claims he was promised to be covered for up to £100,000

Legitimate coronavirus business interruption (BI) claims have been ”agreed and then withdrawn” which could leave many businesses out of pocket, says Night Time Industries Associations (NTIA) chief executive Michael Kill.

The NTIA teamed up with specialist broker NDML Insurance and barrister Philip Kolvin QC to address this.

Kill said: “We have heard countless stories where businesses have had written confirmation of cover from insurers such as Hiscox, and then their claim has been denied later down the line. It’s our responsibility to bring the industry together and share these injustices.”

Insurers have an obligation under Financial Conduct Authority (FCA) regulation to treat customers fairly.

Simon Mabb, managing director at NDML Insurance, welcomed the FCA’s involvement in taking legal action against insurers.

He added: “This will ease significant amounts of stress on individual policyholders, who had previously been looking to launch their own costly legal proceedings.

“That said, we really cannot believe it has come to this. Legal action should not be a necessity in cases where the insurer has clearly confirmed cover, or even misled customers to believe they have cover for business interruption caused by the coronavirus pandemic. This is diabolical behaviour and the unfair treatment of customers is a clear breach of FCA regulations.

“As the leading insurance broker for the industry, we see it as our duty to stand by businesses and offer a voice of protest against the way certain insurers are handling the situation. The future of thousands of businesses, not to mention the reputation of the insurance industry, is at stake here and we must do all we can to find a swift, categorical resolution.”

Make or break

Senate Group Limited’s Paul Keeling is just one of the business owners awaiting a business interruption payout from Hiscox.

The firm provides training sessions across the country, as well as consultancy and security services delivered from its offices in Alsager, Cheshire East. 

In February 2020, the business sought advice from Hiscox regarding business interruption insurance for covering coronavirus.

Hiscox confirmed in writing that Senate Group Limited would be covered for up to £100,000.

However, Keeling said that Hiscox has now denied all claims relating to coronavirus, stating that its “core policy wordings do not provide cover for business interruption as a result of the general measures taken by the UK government in response to a pandemic”.

Keeling added: “Hiscox’s £100,000 business interruption pay-out could quite literally make or break our business. We are now left waiting to see if insurers will come good on their previous promise of pay-out. If not, businesses like ours will be in serious financial trouble. It is simply not reasonable to put people in this position. Real businesses and livelihoods hang in the balance.”

Meanwhile, a spokesperson for Hiscox said: “We understand these are difficult times for businesses and we are paying claims that are covered by the policies we issue fairly and quickly. We cannot comment on the specifics of individual cases, but if we have provided incorrect information to a customer in relation to their policy, we will always look to put it right. We review every case individually, and if any customer has concerns, we encourage them to get in touch with us directly.”

There has been no firm date set for the FCA’s court case and no major change in stance from implicated insurers.

Read more…BI coronavirus payouts could spell commission clawback worry for brokers 

Not subscribed? Become a subscriber and access our premium content

money pressure resilience