World’s Insurers Await U.K. Covid Ruling With Billions at StakeSeptember 12, 2020
Insurers battered by coronavirus are about to find out how much worse the damage could get.
A London court is set to rule Tuesday in a case involving about 370,000 policyholders, companies includingZurich Insurance Group AG andHiscox Ltd. and potentially billions of pounds of claims. The U.K. markets watchdog brought the case after small businesses struggled to get compensation from insurers for losses suffered during lockdown.
“Insurers and regulators around the world will be looking at this case,” said Bloomberg Intelligence analyst Sarah Jane Mahmud. The regulator “has never taken a step like this; it’s completely unprecedented.”
The Financial Conduct Authority is seeking legal clarity on disputed language in so-called business-interruption policies to help determine when payouts should be made. The ruling will be binding for the eight insurers named in the case, and could affect others that have policies containing the wordings, includingAllianz SE,American International Group Inc. andChubb Ltd. It will alsoprovide guidance for interpreting similar clauses in future court cases, according to the FCA.
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