Hiscox faces £40m arbitration claim
Representing the Hiscox Action Group, Mischon wrote to Hiscox earlier this week to trigger the arbitration clause in nearly 350 policyholders’ contracts and seek payment of almost £40m.
However, Mishcon says the total number of policyholders claiming under the action is expected to grow significantly as more members of the group sign up to the proceedings.
Additional claims are also expected to be brought by policyholders under the Insurance Act.
The Hiscox Action Group represents Hiscox clients whose Coronavirus-related business interruption claims have been rejected by the insurer; a situation faced by a number of operators in the hospitality sector, and not just those insured by Hiscox.
“We were only appointed two months ago and have moved incredibly swiftly to get to this point," says Richard Leedham, the Mishcon partner who is handling the action
"We know that many of our claimants are small businesses who desperately need this money to survive and we are pushing as hard as we can to help them.”
Hiscox is one of eight insurance firms called on by Financial Conduct Authority (FCA) to take part in a High Court test case next month, to decide whether their business interruption policies should pay out on claims related to the Coronavirus pandemic.
The FCA says it hopes the case will provide clarity regarding the issue to both policyholders and insurers.
Responding at the time, Hiscox said it welcomed the FCA's announcement.
"As set out in previous announcements, Hiscox recognises these are extremely difficult times for businesses and is committed to seeking expedited resolution of any contract dispute," it said in a statement.
"Hiscox has agreed to assist the FCA by participating alongside other insurers in the test case in order to provide certainty for businesses and brokers on the application of policies as quickly as possible.
"As described in the company's Q1 Trading Statement on 5 May, Hiscox is actively settling claims for event cancellation and abandonment, media and entertainment and other segments including travel. There is no change to any of the estimates or guidance provided in that update, and the Group's capital position remains robust."
