By Huw Jones
LONDON (Reuters) – Britain’s Financial Conduct Authority said eight insurers, including Hiscox and QBE, will take part in a test case to decide whether their policies should compensate companies hit by the coronavirus pandemic.
A national lockdown has triggered insurance claims from companies seeking compensation for having to shut down their activities as a result of the coronavirus crisis.
The FCA said last month it would seek clarity from the courts on whether the wording of some insurance policies should provide cover during the pandemic.
The FCA said on Monday it has selected 17 examples from business interruption insurance policies used by 16 insurers.
“We expect the test case to provide guidance for the interpretation of many other business insurance policies that are not in the representative sample,” the FCA said.
A subset of eight insurers were asked to take part in the court case, including Hiscox, QBE, Royal & Sun Alliance and MS Amlin, the FCA said in a statement.
The insurers have entered into a framework agreement with the regulator governing the process and timetable, it added.
Hiscox said it has agreed to assist in the test case to provide certainty for businesses and brokers on the application of policies as quickly as possible.
The FCA said it expects the court case will happen in the second half of July and last 5-10 days.
“In early July, we expect to publish a comprehensive list of other insurers and many other BI policies in the market that we expect the test case to affect, based on firm submissions,” it said.
(Reporting by Huw Jones; Editing by Rachel Armstrong and Alexander Smith)
