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London judges have ruled that some of the world’s biggest insurers were wrong to reject tens of thousands of claims from small firms battered by the COVID-19 pandemic, Britain’s Financial Conduct Authority (FCA) said on Tuesday.
The FCA, which brought the test case against insurers in a closely-watched lawsuit estimated to affect 370,000 businesses and billions of pounds of insurance claims, said the court had found in favor of policyholders’ arguments on the majority of key issues in a complex, 162-page judgment.
The watchdog brought the case against eight insurers, including Hiscox, RSA, QBE and Zurich , in June to clarify whether 21 types of business interruption (BI) policy wordings should pay out for closures and disruption caused by the pandemic.
The regulator has estimated the case could affect more than 60 insurers and 700 different types of policies because many insurance policies have similar wording.
But the complexity of the judgment was underlined by the response from the insurers’ trade body, the Association of British Insurers (ABI). It said the judgment “divided evenly” between insurers and policyholders on the main issues.
Hiscox said fewer than one third of its 34,000 UK BI policies would have to pay out, meaning the net …
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