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Law360, London (June 9, 2020, 1:10 PM BST ) Swiss insurer Helvetia said Tuesday that most of its policyholders in the restaurant business have accepted settlements following disputes over cover for the COVID-19 pandemic, a solution it said will help struggling companies and avoid legal costs for itself.
The insurer said that, although it does not offer cover for pandemics, it had agreed last month to settle claims for 50% of their full value.
Some 85% of the company's restaurant customers in Switzerland have accepted the settlements, which translated into a "high double digit" figure in the millions of Swiss francs. Helvetia said it has has also offered settlements to policyholders in Germany and Austria.
"This pragmatic approach has enabled Helvetia to provide security for the affected businesses and, at the same time, reduce its own risks, resulting from legal action for example," the insurer said.
The St. Gallen-based company is one of the few insurers that have denied liability but which have agreed to make any form of payment for claims linked to the COVID-19 outbreak, which has pulled down the shutters on businesses around the world.
In the U.K., the Financial Conduct Authority will take eight insurers to court in an attempt to get a legally binding ruling over liability, using the wording of 17 business interruption policies.
Helvetia said its settlement offer applies to companies that have a policy offering cover for epidemics, but not for pandemics. The insurer said that alone was sufficient to mean it could dismiss claims, although it acknowledged that there are "conflicting views on the effectiveness of the pandemic exclusion."
Companies that accept the offer will have to allow their existing policies to be amended to reflect a "shared understanding with the customer that claims resulting from a pandemic are excluded."
In a separate move, Helvetia said it has gained approval from regulators in Spain and Europe over its acquisition of Spanish insurer Caser.
Helvetia announced in January it would buy a 70% stake in Caser for €780 million ($880 million). It said on Tuesday the regulatory green light means it can complete the acquisition by the end of June.
--Editing by Ed Harris.
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