Broker lawsuits are inevitable in virus claims war, but their success is not

Our Head of Insurance Litigation, Roger Franklin recently spoke to Ben Dyson of S&P Global Market Intelligence on disputed Covid-19-related business interruption claims.

Insurance brokers can expect to be sued if their clients’ coronavirus-related business interruption claims are denied, according to lawyers and specialist insurers. But they add that policyholders and their representatives may struggle to make accusations of negligence stick.

Court battles continue over whether insurers were right to deny policyholders’ business interruption claims. In the UK, the Financial Conduct Authority’s test case is moving toward appeal following a mixed High Court judgment that favored policyholders in some circumstances and insurers in others. Whether the UK Supreme Court reverses the original decision or affirms it, some policyholders will be disappointed.

Aaron Le Marquer, a partner at Fenchurch Law, which represents policyholders, said in an interview that there would “inevitably” be legal claims against brokers, because “wherever policyholders are left with no coverage and don’t get their claims paid, brokers are always next in the firing line and the target for potential recovery.”

Roger Franklin, partner and head of insurance litigation at law firm Edwin Coe, said in an interview that pursuing claims against brokers “is something we have certainly been looking at.” He added: “We have had a few inquiries already from insureds.”

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