Insurers Drop Appeal Against UK Court Ruling on 3 COVID Business Interruption Policies

Six insurers have decided not to appeal against a London High Court ruling that they were wrong to reject claims from holders of three business interruption insurance policies who have been pushed to the brink of collapse by the COVID-19 pandemic.

RSA, QBE, Hiscox, MS Amlin, Argenta and Arch were expected to challenge the judgment to pay affected customers holding five types of policy in a fast-tracked Supreme Court case to be heard by end-2020.

But the appeals linked to the Resilience, Eaton Gate Retail, and Eaton Gate Pubs & Restaurants policies have now been dropped, legal documents show, raising hopes that hundreds of vulnerable businesses could see their claims processed without further delay.

A spokesman for RSA, one of the largest of the six insurers, said it would work with broker Marsh to make interim payments where appropriate.

Businesses across the world have been locked in disputes with insurance companies over pandemic-related payouts.

Insurers say they are paying valid claims but that many policies exclude pandemics, require physical damage to premises or do not apply to widespread lockdowns, and paying out all claims could be catastrophic for the industry.

“It is of course a huge win for large portions of the UK’s business community, which for so many months has been told by insurers that insurance policies do not cover losses relating to the COVID-19 pandemic; that is plainly wrong,” said Mishcon de Reya partner Sonia Campbell, on behalf of the Hospitality Insurance Group Action.

Britain’s Financial Conduct Authority brought a case against a total of eight insurers in June to clarify whether 21 policy wordings, affecting potentially 700 types of policies, 60 insurers, 370,000 policyholders and billions in insurance claims, covered disruption and government-ordered closures to curb the virus.

The High Court in London last month ruled that many business interruption policies did in fact provide such cover. Two of the eight insurers, Zurich and Ecclesiastical, said they had no need to appeal since the judgment already found in their favor.

According to the documents, the insurers will continue to appeal the court’s findings in respect to the Cottagesure and the Eaton Gate Commercial Combined policies.

(Reporting by Sinead Cruise; editing by Alison Williams and Tomasz Janowski)

Photograph: View of an empty Shaftesbury Avenue around what would normally be theatre opening time on Saturday March 21, 2020, the day after Prime Minister Boris Johnson ordered the closing of public meeting places like theaters, pubs, and restaurants across the country in measures to limit the spread of the coronavirus outbreak. Photo credit: Dominic Lipinski / PA via AP.