Lloyd’s of London Chief Executive John Neal said on Thursday he expected a London judgment, which ordered some insurers to compensate struggling businesses for losses during the COVID-19 pandemic, to be appealed.
London judges ruled that some of the world’s biggest insurers were wrong to reject tens of thousands of claims from small firms who say they face ruin after the government imposed stringent restrictions to curb the deadly virus.
The Financial Conduct Authority (FCA), which brought the case in June against eight insurers including Hiscox, RSA, QBE and Zurich Insurance, said last week the court had found in favor of policyholders’ arguments on the majority of key issues.
When asked on a panel at a conference organized by insurance buyers’ association Airmic if he expected an appeal, Neal said “yes,” adding that due to the complexity of disputes over policy wordings, “cases run for a period of time.”
He did not elaborate on whether he expected one or both of the sides to appeal aspects of the judgment.
Zurich and Ecclesiastical, a smaller insurer, have said the judgment confirmed they were right to deny policy claims.
But the FCA and other insurers, several of which have operations in the Lloyd’s of London market, have not formally announced plans to appeal on points they have lost.
Both sides have the chance to present any appeal requests at a hearing on Oct. 2.
The FCA has said the case could affect more than 60 insurers, 700 different types of policies and 370,000 policyholders, as many policies have similar wordings.
Businesses, their lawyers and insurance brokers have urged insurers to pay claims as soon as possible to relieve financial distress.
Law firm Mishcon de Reya, which represents the Hiscox Action Group of small businesses, said on Thursday it had written to the FCA to demand it use its regulatory powers if insurers delay payments.
The FCA has told insurers to make interim payments on policies where the legal process is complete or if the claim has been accepted in full or in part.