Today sees the supreme court start a four day process to judge on the test case brought by the Financial Conduct Authority against eight insurers.
The case looks at how despite selling business interruption insurance the insurers have not paid out on claims by their customers.
The stakes are high as many of the circa 200,000 policy holders have little chance of avoiding business failure without their claims being honoured. The Association of British Insurers estimates that the collective value of claims is approximately £900 million.
Back in September, the high court found in favour of the Financial Conduct Authority claim but the insurers then immediately raised an appeal to further delay any prospects of a pay-out.
While the legal wrangling has continued since the appeal the lack of any income to hospitality businesses through a second wave of enforced business closure will have already proved terminal for some.
Richard Leedham, the Mishcon de Reya partner representing the Hiscox Action Group, told us: “The tragic reality is that as each day passes, more SMEs are forced to close, more businesses have to consult insolvency practitioners and more families find out what it means to see their businesses fail and their livelihoods disappear.”
The arguments in the supreme court will doubtless revolve around complex legal frameworks with counsel for the insurers seeking a legal loophole to crawl through to evade payments by their clients. While the process continues, so does the body count of failed hospitality businesses.
The insurers appealing the high court ruling are:
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Hospitality & Catering News: Hospitality business interruption insurance – 16 November 2020 – Hospitality business interruption insurance.
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