The insurer Hiscox has agreed a settlement with a group of about 400 companies, including a number of estate agents, over business interruption losses suffered as a consequence of of lockdowns during the Covid-19 crisis.

Insurance companies refuse to pay out when businesses tried to make claims at the start of the pandemic last year.

But a test case at the supreme court in January this year found that six major insurers, including Hiscox, should make payments totalling about £1.2bn.

The supreme court test case was brought by the Financial Conduct Authority (FCA) to assess whether insurers were entitled to exclude insurance claims made against the Covid-19 pandemic.

Judges found that policies should provide cover and the FCA urged insurers to pay out to about 370,000 businesses thought to be affected.

The Hiscox Action Group, representing the 400 businesses, including estate agents, participated in the hearing and announced yesterday that a settlement has been reached. Both sides agreed that the amounts should remain confidential.

Hiscox said in March that it had set aside £341m to cover pandemic-related payouts.

In a joint statement, Hiscox and the action group, funded by Harbour Litigation Funding, said: “The settlement is in line with the supreme court judgment, and the proceedings have now been resolved to the mutual satisfaction of all parties.”