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FCA shares the claims of the insurers’ coronavirus that it will test in court

Siân Williams-Jones initially thought her company was covered because her policy included a 'Notifiable Illness' clause

Siân Williams-Jones initially thought her company was covered because her policy included a ‘Notifiable Illness’ clause

Multiple insurers have started paying out to companies for policies they previously claimed did not involve coronavirus-forced closings, as the financial watchdog has revealed they will test these in court.

There have been a series of disputes in recent months between companies needing to close their doors and insurers claiming that their policies do not provide coverage due to the coronavirus pandemic.

A small business owner, Siân Williams-Jones, 40, of Shropshire, told This is Money that she was checking her insurance policy and, to her relief, discovered that she was apparently covered for ‘notifiable illness’.

However, when she approached her insurance broker, she was told the closure of her hair salon was not covered.

She said, “They told me there was no one specializing in this claim, because they mainly work from home.

“They asked someone to call me back, and they called me back the same day, but said it was a waste of time to pursue it because I can’t claim it.”

Last month, the Financial Conduct Authority outlined a plan to resolve this by asking the judge for a legal judgment on a series of contested policies.

Yesterday, the FCA released a list of which insurers use the policy formulations it plans to take before the High Court in July – revealing that some insurers have now started paying out policies they previously contested.

Last month, the watchdog asked 56 different insurers to provide them with information about their business interruption policies.

Today it said it has revised more than 500 relevant policies from 40 insurers, narrowing it down to 17 policy formulations, which it believes cover most of the major disputed issues.

The City watchdog has revealed what policy formulations it now plans to test in the High Court

The City watchdog has revealed what policy formulations it now plans to test in the High Court

The City watchdog has revealed what policy formulations it now plans to test in the High Court

These policy formulations you can find here. The FCA has also released a preliminary list of policies that match the terms they want to test, which you can find here. It plans to publish an updated list early next month.

Which insurers use policies tested by the FCA?
Allianz insurance
AIG UK
Arch Insurance
Argenta Syndicate Management
Aspen Insurance
Aviv
Axa
Chubb
Ecclesiastical
Hiscox
Liberty Mutual
MS Amlin
Protector Insurance UK
QBE
RSA
Zurich

But the watchdog also claims that a number of insurers, once approached, decided to accept claims that were previously in dispute.

The FCA has not indicated how many insurers have done this, nor how many claims have now been settled.

Christopher Woolard, interim chief executive at the FCA, said, “The legal action we are taking is aimed at providing clarity and certainty to everyone involved in these disputes, both policyholder and insurer.

“We think it is also the fastest way to this clarity and by covering multiple policies and insurers it will also be most helpful across the market.

“The identification of a representative sample of policies and the consent of insurers to subscribe to participate in this procedure is a major step forward in bringing the case to justice.”

The High Court case will continue next month.

The companies are let down by their insurers

Siân Williams-Jones, 40, of Shropshire, is one of many entrepreneurs who thought they were insured for illness, but found that their insurance company lifted the drawbridge when they tried to file a claim.

Siân, who has a hair salon, followed developments in the field of coronavirus closely and initially took numerous safety and hygiene measures to try to keep the trade as long as possible.

However, when the government closed bars and restaurants in late March, it had no choice but to close the doors of its business.

Siân's company, Williams hair salon from Welshampton, ran for 12 years before the corona virus forced it to close

Siân's company, Williams hair salon from Welshampton, ran for 12 years before the corona virus forced it to close

Siân’s company, Williams hair salon from Welshampton, ran for 12 years before the corona virus forced it to close

“I felt it was inevitable that the hair and beauty industry would be closed after this,” she said.

“It had been very stressful a few weeks earlier and I was extremely worried about the company’s close contact and the implications it could have for myself, my staff, our customers and, even more worryingly, our families. ‘

After deciding to close on March 21, the government ordered all hair salons to be closed the following Monday, March 23.

Sian said of her broker, “They weren’t very helpful and basically said,” I know it’s disappointing, but it’s the same for any other company. “

Sian plans to reopen her company, but says she finds it difficult due to a lack of government guidelines.

The Lewtrenchard Manor hotel in Devon has had to close its doors, but the insurer refused to pay out - despite insurance specifically protecting against 'infectious human disease'

The Lewtrenchard Manor hotel in Devon has had to close its doors, but the insurer refused to pay out - despite insurance specifically protecting against 'infectious human disease'

The Lewtrenchard Manor hotel in Devon has had to close its doors, but the insurer refused to pay out – despite insurance specifically protecting against ‘infectious human disease’

Another business owner, Duncan Murray, who runs the Lewtrenchard Manor hotel in Devon (pictured above), told This is Money that his claim was rejected because coronavirus was not specifically reported at his hotel.

Specifically, Mr. Murray’s policy documents, seen by This is Money, cover the “inability to use the insured buildings due to restrictions imposed by a government agency following the occurrence of a human infectious or infectious human disease “.

He said, “We closed on Monday the 23rd [of March] and we have been closed ever since. It has caused a cash flow problem. I had enough to pay my staff and suppliers, but now there is no money left in the bank account. In the meantime, I had to apply for a business interruption loan. It is a very frustrating time. ‘

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