Upheld: unreasonable delays in claim handling and unfair assessment of business interruption claim complaint against HCC International Insurance Company Plc
Financial Ombudsman decision DRN-6265836 of 2026-04-24T00:00:00+00:00. unreasonable delays in claim handling and unfair assessment of business interruption claim complaint against HCC International Insurance Company Plc. Outcome: Upheld.
Decision detail
| Reference | DRN-6265836 |
|---|---|
| Decision date | 2026-04-24T00:00:00+00:00 |
| Firm | HCC International Insurance Company Plc |
| Product | business interruption insurance |
| Claim type | unreasonable delays in claim handling and unfair assessment of business interruption claim |
| Outcome | Upheld |
| Remedy | HCC must: (1) Reassess and pay L's business interruption claim for 8 months instead of 8 weeks in line with policy terms, offsetting any amounts already paid; (2) Pay interest at 8% per annum simple on the business interruption claim from three months after it was made until paid; (3) Pay L £400 compensation for delays in dealing with the claim. |
Summary
L, a limited company, claimed on its HCC business interruption insurance policy following flood damage to its premises in December 2023 that damaged essential commercial equipment. HCC delayed making any payment for 8 months and did not fully settle the contents claim until 11 months after it was made, during which time L could not trade. HCC offered to pay business interruption for only 8 weeks, arguing L was underinsured for the fryer and should have self-funded replacements. The ombudsman upheld L's complaint, finding HCC's delays unreasonable and unjustifiable, and directed HCC to reassess the business interruption claim for 8 months instead of 8 weeks, plus interest and £400 compensation.
The Ombudsman's reasoning
The ombudsman found that while L had a duty to mitigate losses and was underinsured for the fryer, HCC's 8-month delay in making any payment was unreasonable and unjustifiable. The delay prevented L from replacing essential equipment needed to trade, and the piecemeal nature of payments meant L could not reasonably be expected to self-fund replacements at prohibitive cost. The ombudsman limited the business interruption claim to 8 months (rather than the full 11 months until settlement) to account for an expectation of some mitigation after the first payment, but rejected HCC's position that only 8 weeks were justified.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| HCC International Insurance Company Plc, all decisions | 117 | 47% |
Source
Read the original decision on the Financial Ombudsman Service website