Hiscox may big itself up as the specialist insurer for niche areas of the market in its advertising, from property and casualty cover for the rich to cyber and kidnapping insurance for business, but it is now facing claims of daylight robbery after refusing to pay out over disruption caused by Covid-19.
A group of disgruntled business customers is so miffed that they are threatening legal action, amid accusations that the firm is trying to avoid coughing up for what they insist are legitimate claims.
For some it will be a nasty dose of déjà vu; last year Hiscox refused to pay out for the millions of pounds’ worth of damage caused to top law firm DLA Piper by the 2017 NotPetya ransomware attack.
Now a group led by Media Zoo, a company which spent £13,425 on its Hiscox policy, has written to Business Secretary Alok Sharma. The firm claims that Hiscox – which uses the strapline “as good as our word” – is avoiding its obligations.
The letter from Media Zoo creative director Mark Killick states: “I am writing to tell you that at least one insurance company – Hiscox Insurance – seems determined to avoid its obligations. Hiscox is a regulated company and I would ask you to either investigate yourself or refer this matter to an appropriate regulatory authority as a matter of urgency.
“If it is the case that in the current crisis Hiscox is refusing legitimate business interruption claims simply to preserve its own capital base, it is a disgrace and one that threatens the future of dozens of decent companies across the UK.”
In a statement Hiscox claimed its business interruption insurance “was not designed to cover the extraordinary circumstances caused by this pandemic, simply too large and too systemic for private insurers to cover”.
The insurance sector has hardly covered itself in glory since the coronavirus outbreak started, with major UK financial services firms, including Aviva, Direct Line, Churchill, Admiral, LV= and Axa UK, blocking travel insurance for new customers almost immediately.
Within days, firms also pulled the plug on policies for sickness and unemployment, with leading comparison site Comparethemarket revealing it had been forced to stop offering quotes on these products.
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