LEGAL | Staff Reporter, UK

Insurance policyholders win test case for COVID-19 claims

The insurers can appeal against the decision.

Some insurers should have paid out for losses caused by lockdown, the High Court has ruled.

The disease clauses in some business interruption policies should have meant they were covered, judges said.

A host of businesses had to close and many looked to insurers to cover their losses but many insurers disputed the claims, arguing policies were never meant to cover such unprecedented restrictions.

This so-called test case was brought by the Financial Conduct Authority (FCA) and had the potential to affect 370,000 mostly small businesses.

The insurers can appeal against the decision and policyholders should hear from their insurer within seven days.

Hospitality Insurance Group Action (Higa), one of the campaign groups backing the FCA's case, said thousands of UK hospitality businesses should now be able to receive pay-outs as a result of the ruling.

"This is fantastic news which has shown that we were right to pursue insurers who across the board denied cover for Covid-related losses, said Sonia Campbell of law firm Mishcon de Reya, which represents Higa.

"I would now urge other hospitality businesses to join us to ensure that they can successfully recover payments from insurers in line with the court's decision."

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