New action group aims to help bars claim insurance

A new alliance for the UK hospitality industry has been established to issue joint legal action against insurance companies that are refusing to pay out business interruption claims amid the pandemic.

Hospitality Insurance Group Action aims to help bars successfully claim business interruption insurance

On 20 March, all UK on-trade venues were ordered to close until further notice due to the Covid-19 outbreak.

The new Hospitality Insurance Group Action (HIGA) is open to firms that have been forced to shut within the sector, including bars, pubs, nightclubs, restaurants, hotels and leisure companies, and had their business interruption insurance claims rejected.

British law firm Mishcon de Reya will serve as HIGA’s adviser on the parameters of bringing a collective group action against a range of insurers. Mishcon has sourced external funding to cover the policy review.

UK hospitality firms can register with the HIGA for free and have their existing business interruption insurance policy reviewed by Mishcon.

The law firm said that any collective claim by HIGA against the insurance industry is “likely to run into tens of millions of pounds, notwithstanding often inadequate policy limits, such is the extent of members’ financial damage”.

Sonia Campbell, partner and head of the insurance disputes team at Mishcon de Reya, said: “Hospitality sector businesses, large and small, have been particularly hard hit by the government-enforced closure during this pandemic and desperately need to mitigate their losses.

“In times of crisis they expect their insurance to respond. Yet I am hearing time and time again that insurers are either stone-walling, unfairly limiting or simply point-blank refusing to pay out under business interruption policies. This strikes us as something that is open to challenge.

“I look forward to assisting all members of HIGA in exploring the possibility of a group claim. There may well be some light at the end of this industry’s very dark tunnel.”

To express interest in joining HIGA, visit www.higaction.com. Mishcon hopes to review the insurance policies of registered parties in a group action by the end of May.

Hiscox claimants

Earlier this month, more than 100 bars, pubs and clubs planned to take coordinated legal action against insurer Hiscox for not paying business interruption insurance claims. As such, a separate action group exists for all Hiscox claimants. Hiscox policy holders should visit hiscoxactiongroup.org for further enquiries.

A recent survey by trade body UK Hospitality found that nearly three-quarters (74%) of UK hospitality companies claimed, or plan to claim, for business interruption insurance.

UK Hospitality said “their chances of success appear limited” as fewer than 1% of firms that claimed have received compensation.