Business interruption insurance: Hiscox makes initial settlement offers

Late night leisure broker NDML has received the first settlement offer for its clients involved in the Financial Conduct Authority (FCA) test case over business interruption insurance.

The broker ran a pro bono joint campaign with the Night-Time Industries Association (NTIA) and Philip Kolvin QC from barristers' chambers 11KBW.

It said it will continue to represent other businesses holding policies with wording highlighted within the Supreme Court case. It has requested clarity from the FCA and the court to ensure that the decision over wording has an absolute outcome, and policyholders are clear on whether they are able to claim. This decision is expected in the coming weeks.

Simon Mabb, managing director of NDML (part of the Romero Group), said: “Sadly not all brokers were up for the fight that was needed to get what our clients deserve. This has been a very challenging situation for our clients and also the insurance industry trying to navigate this crisis, but keeping the lines of communication with clients, the FCA and Hiscox open has enabled us to get these settlements finally moving.”

Philip Kolvin QC said: “These payments are welcome but overdue and would not have come at all without the efforts of the FCA, NTIA and NDML, who achieved this result without costing policyholders anything. A better insurance scheme needs to be found. Small businesses shut down by a pandemic should not find their survival dependent on a Kafkaesque struggle in linguistics with insurance behemoths and their smart lawyers.”

Michael Kill, chief executive of the NTIA, added: “This has been a long journey which has seen many casualties, but we are pleased to finally announce that the FCA Supreme Court case is starting to bear fruit for some of the hardest-hit businesses during the pandemic.

“We still have some way to go, and will be working with the FCA over the coming weeks to feed back on actions from other insurers presenting policy wording that will have been included within the case. We are continuing to ask the FCA and the Supreme Court to ensure that the decision over wording has an absolute outcome so that policyholders are clear on whether they are able to claim on their business interruption insurance.”

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