‘Vast majority’ of  ERIC’s 24,000 UK customers will be covered by scheme

Unrated Icelandic insurer European Risk Insurance Company (ERIC) is now in default, according to the Financial Services Compensation Scheme (FSCS)

The FSCS estimated that more than 24,000 people in the UK may have insurance with ERIC.

The FSCS said the “vast majority” of ERIC’s UK customers are expected to be covered, which means the scheme may be able to pay claims against the firm.

FSCS chief executive Mark Neale said: “We’re working closely with ERIC’s resolution board in Iceland on paying claims. FSCS will pay any protected claims as quickly and efficiently as possible. For the time being we understand existing policies remain in force.”

The FSCS will protect many of the policies ERIC sold in the UK to individuals, small businesses and any policyholder who purchased compulsory employers’ liability cover.

ERIC sold a variety of policies that fall under FSCS protection, including homeowner, general liability, commercial combined, professional indemnity and employers’ liability.

ERIC stopped writing business in February after losing its licence from Iceland’s financial regulator, the FME.

It emerged in early April that the company had suspended claims payments.