- Insurance company Hiscox said its 'core policy wordings' did not provide cover for business interruptions caused by lockdown measures to combat Covid-19, but that its disaster scenario nevertheless estimated losses of $175m from a global pandemic.

The company updated the market with the details amid reports some UK insurers were facing legal action from small business owners who'd had their claims rejected.

Hiscox said it provided business interruption cover to small and medium sized enterprises as part of its small commercial package policies.

It said about 10% of its UK small commercial package customers purchased cover for business interruption, with about 10,000 of those were directly impacted by mandated government closure to stop the spread of Covid-19.

'Over 70% of these customers have monthly revenues of less than £40,000 in a normal trading environment, with a significant proportion below £10,000 per month,' Hiscox said.

'The level of economic loss experienced by these businesses is likely to be materially lower than revenues in a normal trading environment.'

'Hiscox believes its business interruption exposure to Covid-19 is limited in Europe and it has negligible exposure in its US retail business.'

'Hiscox Retail has substantial reinsurance cover in place.'

'Hiscox publishes a realistic disaster scenario which estimates a net loss of $175m for losses emanating primarily from event cancellation, entertainment and travel in a global pandemic scenario.'

'Hiscox is proactively paying claims for these lines of business and the claims are progressing in line with its expectations.'

At 2:58pm: [LON:HSX] Hiscox LTD share price was -85.3p at 757.1p

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