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Michelmores considers COVID-19 group actions on behalf of policyholders with business interruption claims declined

By May 21, 2020January 26th, 2021Member News & Updates

Michelmores' policyholder Insurance Team is considering launching a series of group actions on behalf of businesses affected by the Coronavirus pandemic, who have had Business Interruption claims declined by insurers.

The Firm is inviting expressions of interests from businesses whose claims have been declined, to join a group action. Michelmores has identified a number of insurers, whose policies it believes may respond to the current circumstances, including:

  1. Aviva (in particular Resilience policies)
  2. Eaton Gate
  3. Hiscox
  4. Geo Specialty
  5. NFU Mutual (in particular Commercial Select)
  6. RSA
  7. QBE
  8. Ecclesiastical (in particular Historic Britain Insurance)

Garbhan Shanks, Head of Michelmores' policyholder insurance team, said: “The Coronavirus pandemic has adversely affected numerous businesses across the United Kingdom.  Some have specific policy clauses (such as non-damage property business interruption or disease extension wording) which should cover business interruption losses, yet the insurers who offered this cover are declining claims. We are considering launching a series of targeted group actions, with the aim of helping policyholders to receive the indemnity funds that they are entitled to.”

Group actions can be structured in different ways.  Michelmores is currently acting, for example, for claimants in a group who individually contribute a small fee, which allows an economy of scale so as to have sufficient funds in place to pursue insurers.  Other group actions may attract third party litigation funders who will pay for all the legal costs, and any adverse costs insurance, should litigation or arbitration be necessary. Third party funders make this investment in return for a certain share of any damages awarded.

Michelmores is tracking the progress of the recently announced, potential Financial Conduct Authority (FCA) action, which will seek to clarify the position for some policyholders.  Michelmores is also liaising with the FCA about certain policy terms which they wish to see clarified by the High Court in their declaratory judgment. 

If your business has business interruption insurance with one of the insurers mentioned above and you would like to register your interest in a potential group action, please email the Michelmores team at: [email protected] and provide the following details:

  1. Name of Policyholder
  2. Name of Insurer
  3. Copy of Insurance Policy if available

All information provided will be kept confidential.