Multinational insurance group RSA has decided not to appeal against the UK High Court’s decision in a recent ruling on the COVID-19 business interruption (BI) case brought forward by the FCA.
The court largely sided with policyholders in the landmark case, meaning UK insurers are expected to pay out on the majority of BI claims linked to the pandemic.
However, insurers still have the option to appeal the ruling and some have been accused of refusing to pay out on owed claims in the meantime.
But RSA has now confirmed it will waive its right to appeal in a move welcomed by policyholder action groups.
“The decision by RSA not to appeal against the High Court’s decision in respect of the RSA4/Resilience wording represents a significant step in the right direction for so many businesses,” said Sonia Campbell, the Mishcon de Reya partner working on behalf of HIGA (Hospitality Insurance Group Action).
“RSA and the other Resilience insurers should now start making payments to affected businesses right away – there is nothing stopping them,” she added.
Despite the decision from RSA, the legal team at Mishcon warns that payments may still not be forthcoming from many insurers, who may well raise other defences to coverage.
Mishcon considers that insurers could still choose to deny significant elements of claims and advance other arguments to try to reduce the amount of loss payable to policyholders.
The firm noted that other insurers that have written policies using the Resilience wording are not technically bound by the decision of the High Court in the test case, but urged them to begin making payments anyway.
“It is of course a huge win for large portions of the UK’s business community, which for so many months has been told by insurers that insurance policies do not cover losses relating to the Covid-19 pandemic; that is plainly wrong,” Campbell continued.
“The High Court has ruled that many policies do in fact provide such cover and it seems RSA at least has accepted that – given it is not appealing the High Court’s judgment in respect of the Resilience policy wording.”
“However, given the insurers’ approach to policyholders’ claims to date, businesses should not expect it to be plain sailing. Every policyholder has to prove its loss, and this is where we expect insurers to continue to frustrate the process; we will continue to try to support businesses to claim successfully from insurers.”
“Given that we have been at the heart of the fight for businesses since day one, we continue to urge businesses to contact us if they find that their insurers are still refusing to pay claims that should be covered.”
