The news follows the results of the test case brought forward on behalf of policyholders by Britain’s financial watchdog, the Financial Conduct Authority (FCA). Hiscox was one of six of the world’s largest commercial insurers involved in the test case, where the insurers argued that many BI policies did not cover widespread disruption during government efforts to curb COVID-19.
The insurers lost the test case, when Britain’s highest court said policyholders had a right to payouts from insurers. The judgement did not detail the size of the payments which insurers needed to make. The ruling also impacted dozens of insurers with similar policy wordings.
HAG also participated in the test case and later brought forward private arbitration proceedings against Hiscox in 2020 to determine matters between the parties not resolved by the test case.
In a statement, it was noted the settlement between Hiscox and the Hiscox Action Group of policyholders was, “in line with the Supreme Court judgement and the proceedings have now been resolved to the mutual satisfaction of all parties”.
Both parties have agreed that the terms of the settlement are confidential.
In March 2021, Hiscox said it had reserved $475 million (around £341.31 million) overall for pandemic-related claims.
The FCA said earlier this month that £757 million in interim or final payments had been issued by insurers to policyholders so far.
