UK - Insurers Cannot Provide Unlimited Cover in Pandemic

Major insurance companies told the UK Supreme Court on Monday it was wrong to assume there could be unlimited cover during a pandemic in an appeal closely watched by thousands of British businesses devastated by the coronavirus crisis.

Opening a fast-tracked, four-day hearing into what Britain’s Financial Conduct Authority (FCA) has called the most important insurance decision of the last decade, a lawyer for insurance company QBE said a British lockdown to curb a virus was once unthinkable.

“A year ago, it was utterly inconceivable that the UK devolved governments closed down almost the entire national economy and consigned healthy citizens to their homes to prevent further transmission of a disease,” Michael Crane told a live-streamed hearing.

But he added: .”..it is a fallacy to assume from the fact that a particular risk might have been foreseen as a possibility at the time of (insurance) contract, that the parties agree … to cover it without relevant limits.”

Thousands of small firms, from wedding planners to night clubs, had to shut down or restrict trading during the pandemic and say they face ruin after insurers rejected claims for business interruption.


Source: Claims Journal