LONDON (ShareCast) - (Sharecast News) - A group of companies seeking £40m of payouts from Hiscox under business interruption policies has received the green light from lawyers and funders to start legal action against the insurer.
Hiscox Action Group's case will be financed by litigation funder Harbour and led by law firm Mischon de Reya, the Financial Times reported. The action will go live in the next few days.

The group has more than 400 members and is one of several set up put to pressure insurance companies to pay out on policies for the financial impact of the Covid-19 crisis. They claim insurers have failed to honour policies for businesses facing potential collapse after they were forced to close during the emergency.

Mark Killick of Hiscox Action Group told the FT its smaller members were "hanging by a thread. It is existential."

Hiscox has said business interruption claims could cost it between £10m and £250m. It has said its policies do not cover disruption to business as a result of general measures taken by the government in response to a pandemic.

After saying in April it would not intervene to help businesses whose policies do not include pandemics, the Financial Conduct Authority is seeking a court ruling on some of the more common policies to get clarity on what should be paid out and to whom.

The regulator asked policyholders on Friday to send it details of disputed claims. Killick told the FT his group would not wait for the FCA because it was ready to pursue its own case.

"We are paying claims that are covered by the policies we issue fairly and quickly," Hiscox told the FT. "As the FCA has said, most UK small business policies across the industry do not cover pandemics."

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