Insurance giant Hiscox’s (LOND: HSX) share price has catapulted higher following a High Court ruling on its policies during the coronavirus pandemic.
The court found in favour of the arguments advanced for policyholders by the FCA, who stated that “disease clauses” in the majority of policies should provide cover to people who are demanding payouts.
The FCA said that 370,000 policyholders were identified as holding policies that may have impacted the outcome of the test case.
Hiscox responded to the ruling, commenting that fewer than a third of its 34,000 business interruption policies may be impacted, with claims expected to be less than £100 million, £150 million less than its worst-case scenario.
The company said in a statement that “Hiscox recognises these are extremely difficult times for businesses and regrets any contract dispute with customers, which is why it is committed to seeking an expedited resolution through this Industry Test Case.
“In line with FCA Guidance, Hiscox will communicate an update on the Industry Test Case to relevant policyholders through the appropriate channels.”
After the news, Hiscox shares exploded higher. They opened up the day priced at 761p per share and are now trading at 873.2p, after a rise of over 15%.
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