By Adriano Marchese
Zurich Insurance Group AG said Tuesday a U.K. High Court's judgment confirmed the company doesn't have to provide cover for pandemic-related business interruption.
The Swiss insurance giant said it welcomed the court decision that confirms that the wording represented by the company don't provide cover for businesses that have seen interruption due to Covid-19.
Earlier Tuesday, the High Court found in favor of the Financial Conduct Authority in its case against the "lack of clarity and certainty" for policyholders when making claims against business losses due to the pandemic.
RSA Insurance Group PLC said Tuesday it expected the ruling to result in about 104 million pounds ($133.6 million) in further payouts, after having already paid or reserved GBP57 million in claims over Covid-19 losses.
While most small-to-mid-size enterprise policies focus on property damage, some policies also cover business interruptions from other causes, such as infectious diseases. However, not all insurers accepted liability under these policies, which led to widespread concern about the lack of clarity and certainty.
Separately, Hiscox Ltd. said estimated an extra GBP100 million of Covid-19 claims from the ruling.
Zurich said that it is reviewing the broader implications of the judgment in relation to wording represented by other insurers in the FCA test case.
"While we welcome the judgment of the High Court in respect of Zurich's wordings, we recognize that Covid-19 has caused immense suffering for our customers, their families and their businesses," Zurich Insurance Chief Executive Mario Greco said.
Write to Adriano Marchese at firstname.lastname@example.org