RSA will not be appealing the High Court’s decision on the RSA4/Resilience wording, according to law firm Mischon de Reya, which has been leading action against the insurer on behalf of Hospitality Insurance Group Action (HIGA).
The news comes amid the ongoing FCA Test Case that was launched in July, when the regulator said it would bring High Court action to test 17 disputed policy wordings that have prevented business owners from receiving payouts through business interruption insurance amid the pandemic.
Last month (15 September), the court ruled that insurers should have to pay out on claims to approximately 370,000 businesses forced to close during lockdown.
The FCA brought the case against Hiscox, Zurich, Arch, RSA, Ecclesiastical, MS Amlin, Argenta and QBE.
Mishcon de Reya partner Sonia Campbell said: “The decision by RSA not to appeal against the High Court’s decision in respect of the RSA4/Resilience wording represents a significant step in the right direction for so many businesses.
“RSA and the other Resilience insurers should now start making payments to affected businesses right away – there is nothing stopping them.”
The firm added that many businesses have received a “potential lifeline” with the news that RSA will not appeal the decision.
The intervention by HIGA and the legal team’s submissions in the FCA Test Case “contributed successfully” to establishing that there is cover in principle under the RSA4/Resilience wordings.
Nonetheless, there had been mounting speculation that insurers would make applications to the Supreme Court to appeal the decision. Whilst many parts of the judgment may still be subject to an appeal to the Supreme Court, it is “now clear that the Resilience wording will not be”, according to HIGA’s legal team.
RSA and the other Resilience insurers should “now start making payments to affected businesses insured with the Resilience wording without further delay”, the firm has argued.
It added: “Other insurers that have written policies using the Resilience wording are not technically bound by the decision of the High Court in the test case – but in reality, they too should now start making payments.”
Campbell said: “It is of course a huge win for large portions of the UK’s business community, which for so many months has been told by insurers that insurance policies do not cover losses relating to the Covid-19 pandemic; that is plainly wrong.
“However, given the insurers’ approach to policyholders’ claims to date, businesses should not expect it to be plain sailing. Every policyholder has to prove its loss, and this is where we expect insurers to continue to frustrate the process; we will continue to try to support businesses to claim successfully from insurers.”