Church loses faith with insurer over lockdown policy

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Churches in dispute with insurer which convinced parishes to ‘put your faith in us’ – but which they allege failed to pay out on coronavirus claims

Churches are in dispute with an insurer which convinced parishes to ‘put your faith in us’ – but which they allege failed to pay out on claims made as a result of the pandemic lockdown. 

They are seeking to clarify in court whether Ecclesiastical Insurance should have to issue payouts to those covered by its Parish Plus insurance policies. 

The churches stand to benefit from a test case about to be brought by the financial watchdog on behalf of tens of thousands of businesses and organisations. 

Faith: Churches stand to benefit from a test case about to be brought by FCA on behalf of tens of thousands of businesses and organisations

Ecclesiastical is also facing potential insurance claims from schools, nurseries, charities and ‘heritage’ businesses. 

The Financial Conduct Authority action also affects a string of other insurers including Hiscox, RSA and Zurich. 

The FCA, whose test case begins tomorrow, points out in court documents that cover offered by Ecclesiastical’s insurance policy encourages customers to ‘put your faith in us’. 

The company – which counts Sir Stephen Lamport, former Private Secretary to the Prince of Wales, as a board member – prides itself on being an ethically run insurer. 

Ecclesiastical has argued in documents: ‘This case is not, however, about providing sympathy to SME businesses (or charities or churches) for their economic sufferings.’ 

The watchdog said: ‘Ecclesiastical appears to deny that there was any prevention of access to churches at any time, any hindrance of access to churches at any time, any prevention of use of churches at any time, any hindrance of use of churches prior to 23 March 2020, any prevention or hindrance of access or use of any other insureds, including schools, nurseries and heritage and leisure organisations at any time. This is an untenable position.’ 

Hiscox revealed in court papers that more than 30,000 of its policyholders will be affected by the outcome of the case. 

If the FCA action succeeds, Hiscox could be forced to pay out to these small business customers. 

There could also be further legal disputes over how much the individual policyholders are owed. 

The insurer argued: ‘It ought to be self-evident that none of the Hiscox wordings in the test case provides cover for loss caused by pandemics.’ 

Hiscox Action group, which comprises 369 businesses with Hiscox policies, accused the insurer of ‘over-intellectualising and over-complicating’ the issues.

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