One agent’s fight for Business Interruption Insuran...

Agents and in some cases their brokers continue to do battle with insurers in a bid to secure pay-outs on their business interruption policies.

Estate agency is only one sector of the economy engaged in arguments to secure payouts, with many insurers claiming their policies do not cover catastrophic events such as a global pandemic.

Last week we reported that one of the insurers offering business interruption policies - Hiscox - warned of the limitations it was putting on its liability to policy holders, which include agents.

Now we have been approached by the head of a large agency, who has asked to remain anonymous, with details of his campaign to secure payment from Hiscox for losses suffered during the lockdown.

We reproduce his circumstances below, starting with the relevant provisions of the policy which he believes make it 100 per cent clear that he should receive payment; then comes two views he has received from brokers.

This policy relates to Hiscox, although other insurers are being challenged by other agents in similar disputes. Hiscox's response is at the bottom of this story.

If you or other agents you know are in similar disputes, please let us know by emailing press@estateagenttoday.co.uk. Thank you and good luck with your battle.

Policy: Relevant provisions

We will insure you for your financial losses and other items specified in the schedule, resulting solely and directly from an interruption to your activities caused by:

3. an incident occurring during the period of insurance within a one mile radius of the insured premises which results in a denial of access or hindrance in access to the insured premises, imposed by any civil or statutory authority or by order of the government or any public authority, for more than 24 consecutive hours;

11. your inability to use the insured premises due to restrictions imposed by a public authority during the period of insurance following:

a. a murder or suicide;

b. an occurrence of any human infectious or human contagious disease, an outbreak of which must be notified to the local authority;

c. injury or illness of any person traceable to food or drink consumed on the insured premises;

d. defects in the drains or other sanitary arrangements;

e. vermin or pests at the insured premises;

First Response from Broker:

As we are getting a lot of queries I am writing to provide you with details on your policy and Coronavirus.

Please note that your Loss of Income or Increased Cost of Working losses are covered if the interruption arises from an insured peril resulting in damage to the premises eg storm or fire damage. This cover does not extend to infectious/notifiable disease.

Your policy does however have a Public Authority extension up to £100,000 for interruption arising from notifiable infectious diseases. This relates to where you have suffered a business loss resulting from a public authority shutting down your own premises. Many insurers exclude cover under this extension as they list covered diseases but Hiscox does not do this so their cover is wider. The wording is detailed below:

Public authority: this is your inability to use the insured premises due to restrictions imposed by a public authority during the period of insurance following:

a. a murder or suicide;

b. an occurrence of any human infectious or human contagious disease, an outbreak of which must be notified to the local authority;

c. injury or illness of any person traceable to food or drink consumed on the insured premises;

d. defects in the drains or other sanitary arrangements;

e. vermin or pests at the insured premises

Non damage denial of access to your premises could potentially be covered for up to £100,000 but for this to react there has to be an interruption to your business activity

Second Response from Broker

‘Hiscox has advised that as this is unprecedented and claims have never been tested they cannot say if specific cases are covered at this stage. Hiscox therefore has advised that any losses are to be submitted for consideration. Please note that if cover is agreed it will be up to £100,000 which is the policy limit’.

A Hiscox spokesperson told Estate Agent Today over the weekend: “We understand these are incredibly difficult times for businesses and we are paying claims that are covered by the policies we issue fairly and quickly. We review every case individually, and if any customer has concerns about the application of their policy, we encourage them to get in touch with us directly.

“Where the application of a policy is disputed, our focus is on helping to provide customers with greater certainty.

“A fair and fast resolution is in everybody’s interests, which is why we will work with the UK insurance industry, our regulators and customers to seek an expedited resolution through the range of existing independent mechanisms.”

Meanwhile it is thought some 200 policyholders, from across a wide range of companies, plan to take legal action against Hiscox over allegedly rejected claims made in recent weeks.

High profile legal firm Mishcon de Reya has been appointed to represent the 200.