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Business interruption insurance lets down agent as Coronavirus hits

Estate agent Mark Rath says he assumed his policy would help recoup revenues lost during the Coronavirus downturn, but has been bitterly disappointed to discover insurer Hiscox has rejected his claim.

Nigel Lewis

An estate agency has been in contact with The Negotiator to complain that the business interruption insurance they paid for prior to the Coronavirus pandemic has failed to pay out, and claimed that many agents are ‘in the same boat’.

Mark Rath of Mark Rath Residential in Wokingham, Surrey says he took out a Hiscox policy via Propertymark-approved broker Gallagher to insure them against the lost revenue that an event like the Coronavirus crisis would cause.

“The policy says we are covered for any notifiable diseases, which Covid-19 is of course,” says Rath.

“We started to make a claim but received a reply from Hiscox saying that it only covered for a notifiable disease that spread inside our office, not outside – but obviously we are outside the office all the time usually doing viewings and since the lockdown we can’t do that.”

Rath says he received a generic response rejecting his claim and suggesting he raise a complaint if unhappy with Hiscox’s response.

“I just want agents to realise that if they take out this kind of policy, they are not covered for a Coronavirus-type pandemic – I’m not sure I’d bother paying for this kind of cover in the future, therefore,” he adds.

Rath says recouping the turnover his business has and will lose during the crisis would have been very useful during the crisis.

Set up four years ago, the business has been successful and profitable but has now had to furlough its two staff.

A spokesperson for Propertymark says: “While we cannot comment on the detail of customer policies, it is important all suppliers fulfil their regulatory obligations and are seen to treat customers fairly. Members who are not covered by their business contingency insurance should explore the other government support that is available for agents.”

Hiscox’s reply

“We understand that these are incredibly difficult times for businesses affected by Covid-19,” a spokesperson said.

“At Hiscox we strive to pay claims that are covered by the policies we issue fairly and quickly.

“However, general business interruption policies across the industry, including Hiscox’s, were not designed to cover the extraordinary circumstances caused by this pandemic.

“The Public Authority clause you refer to is designed to cover losses resulting ‘solely and directly’ from an interruption caused by an inability to use insured premises due to restrictions imposed by a public authority.

“This means that in no case would it cover losses that would have arisen even if the premises could have been used or accessed, such as those suffered as a result of the wider economic slow-down following the actions the Government has taken requiring people to stay at home.

“It is triggered following the happening of certain specific events at, or local to, the premises, for example; a murder, an occurrence of a contagious disease that must be notified to the local authority, food poisoning, problems with the drains or vermin.

“For example Legionnaire’s Disease which requires the policyholder to notify the local authority and shut access while it is professionally cleaned.

“The government’s decision to impose social distancing preventative measures to stop the spread of Covid-19 across the country is not directly aimed at limiting access to an individual business’s premises, or any particular business premises.

“Like terrorism and flood, which have government-backed insurance schemes, pandemics such as coronavirus are so large and systemic that most insurers do not provide broad pandemic cover.

“Given the seriousness of the situation, we took senior independent legal advice on how our policy would be interpreted.

“The legal view is that the policy does not respond in the current circumstances. We are consulting with our regulators on the actions we are taking, and customer complaints are also being reviewed in line with our usual, robust and fair complaints procedure.

“We will be carefully considering each claim to ensure our approach is fair.”


April 15, 2020


  1. Ronnie, who else is involved with challenging this. We are with Hiscox and my broker thought it would be worth appealing.

  2. I have this insurance and had a totally different reason as to why they rejected the claim. There was an article in the independent at the weekend concerning this, I believe there is a group action starting as HiscoxBJ are simply trying to move the goalposts mid match. I will told initially that I had to have a certificate from the local authority confirming we were required to close, when I pointed out to them that wasn’t the policy wording they came back and said that the policy was not designed for this type of event, it wasn’t in the spirit of the wording. I believe the group action stands a very good chance of success, the policy wording is very friendly and this is absolutely a covered situation.

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