NTIA challenging Hiscox insurance claim denial

By Nikkie Thatcher

- Last updated on GMT

Call to action: the Night Time Industries Association is consulting a legal expert about insurance claims
Call to action: the Night Time Industries Association is consulting a legal expert about insurance claims

Related tags: Coronavirus

The Night Time Industries Association (NTIA) has instructed a barrister to co-ordinate claims against Hiscox insurance for its refusal to pay out under its business interruption policy.

NTIA chief executive officer Michael Kill said night-time economy businesses are being denied legitimate insurance claims, with many being disputed by insurers based on contrived arguments to avoid sharing the financial burden during the Covid-19 crisis.

The association has instructed Philip Kolvin QC of Cornerstone Barristers to advise on its members’ rights under their insurance policies.

Kill said: “One of the main leisure sector policies was underwritten by Hiscox insurance, which has written to its clients, denying liability.

“Philip Kolvin has advised claimants insured by Hiscox against closure by public authorities, and who had to close their premises under the regulations, have a good case against Hiscox.

“We want to talk urgently to any businesses within the hospitality and leisure sector that have a policy with Hiscox and would like to join the current group of more than 100 claimants to progress a legal case against the company.”

Severe hardship

Kolvin highlighted how leisure operators are suffering severe hardship and claimed there is a clear and present danger the industry will be decimated, leisure businesses throughout the UK will go to the wall, jobs and livelihoods will be lost and the cultural capacity of the nation will be depleted for years to come.

He said: “We should celebrate the NTIA has stepped up to the plate to support the sector. It is time now for those insurance companies that know they are liable under their policies do the same.

“The clue is in the name ‘insurance’. It is what they are in the business for. They should not be running for cover. They will never be forgiven for doing so.”

NDML Insurance is the broker working with NTIA and Kolvin to represent clients in pursuing claims for business interruption losses due to the Covid-19 lockdown.

Direct call

NDML managing director Simon Mabb said: “We are exploring every possible avenue to get insurers moving and paying legitimate claims to their clients.

“This is a direct call to certain insurers to do the right thing now, even though times are hard. Now is the time to work together. Not to find loopholes and rewrite wordings that exclude claims. But to stand by the clients that have stood by you for so many years, to recognise that loyalty. And to save our industry.”

A spokesperson for Hiscox said they understood these were incredibly difficult times for businesses.

They added: “We are paying claims that are covered by the policies we issue fairly and quickly.

“We review every case individually and if any customer has concerns about the application of their policy, we encourage them to get in touch with us directly.”

Hiscox has also posted a statement on its website that says it has conducted further analysis of its potential exposure to the pandemic.

It said it was actively settling claims for event cancellation and abandonment, media and entertainment and other segments, including travel.

On the basis disruption caused by restrictions on travel and mass gatherings continues for six months from March 2020, Hiscox expected to pay net claims totalling up to $150m (about £120m).

Should restrictions on travel and mass gatherings be extended beyond six months, the insurance company expected these claims could rise by an additional $25m (about £20m).

No cover for Government measures

It went on to say its core small commercial package policies do not provide cover for business interruption as a result of the general measures taken by the UK Government in response to a pandemic.

Hiscox UK has about 10,000 customers that bought cover for business interruption and have been directly impacted by Government premises closure.

It added more than 70% of these customers have a monthly revenue of under £40,000 in a normal trading environment with a significant proportion below £10,000 a month and claimed the level of economic loss experienced is likely to be materially lower than reported revenues.

The statement went on to say a number of UK policyholders have disputed the application of their policy in relation to business interruption.

Hiscox said it recognised these were extremely difficult times for businesses and is determined to help provide greater certainty for its customers.

It added as a priority it will work with the UK insurance industry, its regulators and its customers to seek means of expediting resolution through the range of independent mechanisms available.

Related topics: Legislation

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