LIIBA Chief Executive Officer Christopher Croft has called for the industry to introduce absolute clarity into the products customers buy, following The UK Supreme Court’s decision to uphold the COVID-19 business interruption test case ruling.
Via a live video link this morning, a UK Supreme Court representative announced the decision to uphold the FCA and the Hiscox Action Group appeals.
The outcome will be welcomed by small businesses in the UK.
For Arch, Argenta, Hiscox, MS Amlin, RSA, and QBE, coverage will have to be honoured. This will also be the case in certain instances where cover had been previously denied.
In response to the news, Croft has described the re/insurance industry’s reputation as having been damaged by the debate over exactly what is or is not insured.
“Re/insurers need to think hard about how to redress that and introduce absolute clarity into the product our customers buy,” he said.
“Everyone in the insurance value chain needs to be committed to ensuring that customers understand exactly what it is they are getting, in language they recognise and presented in a way which makes sense to them.”
In the same statement, Chartered Insurance Institute director of policy and public affairs Matt Connell said the judgement will have huge ramifications for insurance beyond business interruption.
“Rest assured insurance professionals will be examining how this affects policies and will reach out to policyholders about what this means for them, indeed in some cases this process will have already begun,” he said.
Earlier today, Hiscox made the decision to add a further $48 million, net of reinsurance, to its 2020 estimate for COVID-19 BI losses.
In response to the final judgement, Hiscox welcomed clarity and said the claims settlement process has commenced.
