Bars plan legal action over covid-19 insurance claims

More than 100 bars, pubs and clubs are planning to take coordinated legal action against insurer Hiscox for not paying business interruption insurance claims.

More than 100 bars, pubs and nightclubs are planning to take legal action over non-payment of business interruption insurance claims

Business owners have filed claims to Hiscox but have allegedly been told their business interruption policies do not cover the covid-19 pandemic.

Michael Kill, CEO of Night Time Industries Association (NTIA), said: “Night time economy businesses are being denied legitimate insurance claims, many claims are being disputed by insurers based on contrived arguments to avoid sharing the financial burden during the covid-19 crisis.”

The group is being advised by licensing industry barrister Philip Kolvin QC, or Cornerstone Barristers, and is calling for more businesses to join its coordinated action against the insurer.

Yesterday (22 April), Hiscox UK said it has approximately 10,000 customers that had bought cover for business interruption and had been directly impacted by government orders to close due to the covid-19 pandemic.

The company also said its core small commercial policies do not provide cover for business interruption as a result of general measures taken by the UK government in response to a pandemic.

A statement from the firm said: “A number of UK policyholders have disputed the application of their policy in relation to business interruption.

“Hiscox recognises these are extremely difficult times for businesses and is determined to help provide greater certainty for customers. As a priority it will therefore work with the UK insurance industry, its regulators and its customers to seek means of expediting resolution through the range of independent mechanisms available.”

Barrister Kolvin stressed that leisure operators were “suffering severe hardship” as a result of the coronavirus crisis.

“There is a clear and present danger that the industry will be decimated, that leisure businesses throughout the UK will go to the wall, that jobs and livelihoods will be lost, and that the cultural capacity of the nation will be depleted for years to come,” he said.

“We should celebrate that the Night Time Industries Association has stepped up to the plate to support the sector. It is time now for those insurance companies who know they are liable under their policies to do the same.

“The clue is in the name ‘insurance’. It is what they are in business for. They should not be running for cover. They will never be forgiven for doing so.”