Insurers Face More Covid Payouts as U.K. Court Appeal Fails
Insurers face increased Covid-19 payouts to small businesses that were forced to close during lockdown, as the U.K.’s top court ruled in favor of policyholders in a dispute over coverage.
The U.K. Supreme Court ruled Friday that policies sold by six firms includingRSA Insurance Group Plc andHiscox Ltd. cover losses sustained when businesses were shut down to help slow the spread of the outbreak. The firms had appealed a lower-courtdecision in September that found some policies in a test case brought by the U.K.’s top markets regulator should pay out.
“The judgment should be a massive boost to all businesses reeling from a third lockdown who can now demand their claims are paid,” said Richard Leedham, a partner at Mishcon de Reya who represents the Hiscox Action Group of policyholders. “The hope and expectation of our clients is that the claim adjustment process starts immediately and that insurers will not continue to cause further distress by further unnecessary delay.”
After initially falling, Hiscox shares rose as much as 2.7% in London on Friday morning as the insurer said that additional business interruption losses for 2020 would be limited to $48 million. RSA shares were little changed.
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