Law360 is providing free access to its coronavirus coverage to make sure all members of the legal community have accurate information in this time of uncertainty and change. Use the form below to sign up for any of our weekly newsletters. Signing up for any of our section newsletters will opt you in to the weekly Coronavirus briefing.
Sign up for our Insurance UK newsletter
You must correct or enter the following before you can sign up:
Thank You!
Law360, London (May 29, 2020, 4:08 PM BST) -- Insurance broker Marsh has handed texts of its policies on business interruption to the Financial Conduct Authority as the City watchdog prepares a High Court test case over pandemic cover for companies that have suffered losses during the pandemic lockdown.
The broker, the U.K.'s largest, said on Thursday that it chose the policies to allow the greatest number of policyholders to be brought into the action.
The FCA called earlier this month for brokers and policyholders to submit details of policies on business interruption for potential inclusion in a test case over insurers' liability, which could be heard in July.
"We deliberately chose a select number of policies that either impacted large numbers of clients, had wide impact to many other clients due to commonality of issues or contained different and specific wordings, which we believe it would be helpful for policyholders to be included," a spokesperson for Marsh said.
Hundreds of small business have said they are launching legal action against insurers after they refused to pay out on claims for business interruption. The court judgment in the case will be legally binding on insurers, the FCA has said.
Standard business interruption policies offer cover only for lost earnings when damage to a premises forces a company to temporarily close.
Marsh said the policy wordings it had submitted were "non-damage" extensions to business interruption policies, such as the outbreak of a so-called notifiable disease or prevention of access by a public authority.
The company spokesperson said there was no guarantee that the FCA will include the policy wordings in its test case but that the broker had "advocated strongly" for their inclusions.
"Marsh remains committed to supporting all our clients' claims," the spokesperson added.
Insurance consultancy Mactavish said last week that, because of the way brokers were partly paid on commission by insurers, there was a conflict of interest that could prevent them from properly representing their clients in claims disputes.
The Mactavish report was strongly denied by the British Insurance Brokers' Association.
"Brokers have helped clients receive millions of pounds in claims payments since the beginning of the COVID-19 pandemic and continue act for their clients to get fair claims settlements," a spokeswoman for the trade body said.
--Editing by Ed Harris.
For a reprint of this article, please contact reprints@law360.com.
