Insurance

UK:Rejected pay-outs could lead to lawsuit against insurers

By Ranamita Chakraborty

After failing to secure pay-outs for disruption caused by COVID-19, hospitality sector action group HIGA plans to launch legal action against insurance giants Aviva and QBE in the UK.

According to a report from national news agency PA Media, HIGA and law firm Mishcon de Reya, said that they will focus litigation against these two insurers following hundreds of complaints.

With insurers deciding to exclude disruption caused by coronavirus from business interruption policies, firms have claimed that they are facing major losses.

HIGA has therefore called on firms in the hospitality sector with policies from Aviva and QBE to join the group’s plans to make a legal claim by 5 June. The group expects to file the claim by 10 June.

In response, QBE UK declined to comment on the matter.

Meanwhile, an Aviva spokesman responded by saying that the insurer supports the Financial Conduct Authority’s decision to bring greater clarity and certainty for customers and insurers on business interruption policies so valid claims can be paid as quickly as possible.

He said, “We hope this approach will accelerate the determination of what are, in some instances, complex technical matters and give much needed certainty to British industry. Aviva’s standard terms and conditions for business interruption do not cover claims relating to the current pandemic.

“However, a small number of Aviva customers may have purchased cover through a broker or scheme that is not on Aviva’s standard terms and which may provide cover.”

Commenting on the planned lawsuit, Mishcon de Reya partner and head of the insurance disputes practice Sonia Campbell said the firm was overwhelmed by the expressions of interest in bringing actions against insurers from within the hospitality industry.

“It demonstrates how hard-hit this sector has been as a result of the government-enforced lockdown and how intransigent many in the insurance industry have been towards their policyholders,” she said.

Asia Insurance Review

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