By Carolyn Cohn
LONDON, July 20 (Reuters) - Some of the world's biggest
insurers are wrong to deny a payout to hundreds of thousands of
small British businesses, battered by the COVID-19 pandemic, the
London High Court was told on Monday.
Britain's markets watchdog has taken eight insurers,
including Hiscox, RSA, QBE and Zurich
, to court.
The businesses, from restaurants to leisure groups, said
they faced ruin after insurers rejected their attempts to claim
millions of pounds collectively in compensation for lost
business.
Colin Edelman, a lawyer representing the Financial Conduct
Authority, told the court on the first day of an eight-day
hearing that the 17 policy wordings under scrutiny in the case
were similar to wordings used by more than 60 insurers in total.
Around 370,000 policyholders could be affected, he said.
The FCA says the pandemic should trigger payments under the
policies, which provide cover when insured premises cannot be
used because of restrictions imposed by a public authority and
in the event of a notifiable disease.
The insurers say the policies covered local incidents,
rather than a pandemic and national lockdown.
"They're not to be protected from the fact that a
cataclysmic event has happened. That's just bad luck being an
insurer," Edelman said.
The FCA, which is concerned customers should be treated
fairly, said in its skeleton argument published last week that
the policyholders in the case were "generally not sophisticated
or well-resourced insurance buyers".
The hearing is due to conclude on July 30.
(Editing by Kirstin Ridley and Barbara Lewis)
