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Law360, London (April 23, 2020, 12:56 PM BST ) A campaign group representing 200 businesses denied compensation by insurer Hiscox over losses linked to coronavirus said on Thursday it has appointed Mishcon de Reya LLP as counsel to prepare a class action suit.
The Hiscox Action Group said it has appointed the law firm to represent the affected businesses and is in advanced discussions with another company to provide financial backing for litigation.
The claims are likely to focus on policies for business interruption sold by Hiscox, which include extensions that offer protection in case a premises is closed because of an outbreak of contagious disease.
"Our instructions are to pursue all claims as vigorously as possible to prevent hundreds of good British companies from being driven out of business," Richard Leedham, the Mishcon de Reya partner leading the action, said.
The Hiscox Action Group is led by London public relations company Media Zoo, as well as Northampton-based Pinnacle Climbing Centre and Lazy Claire Patisserie in Belfast, Northern Ireland. The PR company said in a statement that "dozens" more companies are joining the group every day.
Separately, the trade body for nightclubs, the Night Time Industries Association, said it has appointed licensing lawyer Philip Kolvin QC, of Cornerstone Barristers, to examine the legal position of more than 100 association members.
Kolvin told Law360 the association is seeking to have the claims dealt with as group litigation rather than individually.
"It appears likely that there will be several hundred claimants, currently spread across different action groups," Kolvin said. "We will be appointing a solicitor from a shortlist, probably next week."
Hiscox issued a statement on Wednesday saying that, although it expects total losses from the pandemic to reach $175 million, it has "limited" exposure to business interruption claims.
"Hiscox's core policy wordings do not provide cover for business interruption as a result of the general measures taken by the U.K. government in response to a pandemic," the company said in a stock market update. Some 10,000 of its business interruption policyholders have been affected by the nationwide lockdown, which involves the closure of non-essential businesses, the insurer added.
It added that most of those affected customers have monthly revenues of less than £40,000. "The level of economic loss experienced by these businesses is likely to be materially lower than revenues in a normal trading environment," the company said.
Hiscox is not alone is facing potential legal action over the rejection of business interruption claims. Aaron Le Marquer, a partner at Fenchurch Law, said last week that the company had received complaints against 10 insurers.
--Editing by Ed Harris.
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