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QBEs reinsurance will limit UK business interruption costs

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QBE, which faces a potential UK class action over cover for shutdowns, says reinsurance would limit its net business interruption claims costs in the country to $US75 million ($115 million).

Business interruption is usually provided as part of a broader policy for property damage and does not typically cover claims arising from the COVID-19 pandemic, it says in a statement to the Australian Securities Exchange today.

“Many businesses are facing an extremely concerning time at present and we are working closely with broker partners and agents to support our customers during this uncertain period,” it says.

QBE and London-based Aviva have been identified for legal proceedings over business interruption claims by the Hospitality Insurance Group Action (HIGA).

Legal firm Mishcon de Reya said last week it has narrowed its focus to the two companies after a review of more than 500 policies from a range of insurers submitted by applicants.

“We are contacting those HIGA applicants insured by Aviva and QBE and inviting them to confirm their continued interest in participating in a group claim,” Head of the Insurance Disputes Practice Sonia Campbell said.

Other businesses in the sector with specifically worded BI policies underwritten by the insurers have also been invited to get in touch by Friday next week if they want to participate.

“We believe this is the best way to ensure some financial recompense for these policyholders following their sudden and enforced closure,” Ms Campbell said.

The legal firm says it’s in discussions with class action funders and expects to be able to move forward by June 10, with the aim of issuing a claim as soon as possible after that.

HIGA says the policy wording for QBE relate to its Hotel Insurance Policy, Leisure Combined, Business Combined Insurance Policy and Nightclub and Late Night Venue Policy.

QBE has declined to comment on the potential action.