Action group litigation to focus on two insurers

20th May, 2020 by Melita Kiely

Hospitality Insurance Group Action (HIGA) will focus any potential legal action regarding unpaid business interruption policies on two insurers – Aviva and QBE.


Numerous bars have had their business interruption insurance claims due to the Covid-19 pandemic rejected

Action group HIGA said its legal advisers, Mishcon de Reya, in conjunction with leading counsel Philip Edey QC, of Twenty Essex Chambers, have completed their review of more than 500 business interruption insurance policies submitted by applicants between 29 April and 6 May.

The legal advisers said the specific coverage clauses within policies underwritten by Aviva and QBE (UK) Limited are those that HIGA is best advised to challenge through a group claim.

The relevant policy wording for Aviva is its ‘Material Damage and Business Interruption Policy’. The relevant policy wordings for QBE are: PHOTO10419 (Hotel Insurance Policy), PLSC010419 (Leisure Combined), PBCC170619 (Business Combined Insurance Policy) and PNML010119 (Nightclub and Late Night Venue Policy).

HIGA is now inviting all hospitality industry businesses with relevant policies to join intended group action by Friday 5 June 2020.

Sonia Campbell, partner and head of the insurance disputes practices at Mishcon de Reya, said: “The decision to limit a potential HIGA legal challenge to just two insurers with specific wordings was always going to be difficult and we recognise many HIGA applicants will be disappointed we are unable to act for them.

“However, we have sought to protect their rights by contacting the FCA on their behalf, potentially affording them the opportunity to engage with the test case the FCA is to bring against as yet unspecified insurers.”

HIGA is also inviting any businesses in the hospitality industry that are not yet registered with the action group, but have sought claims under their business interruption policies with Aviva and QBE that have been “ignored or thwarted”, to register with HIGA.

All existing HIGA members will be contacted directly to explain whether the legal team thinks their policies potentially offer coverage or not. However, the group said only those with specific policies outlined previously would be eligible to take part in the planned HIGA-led group action.

Campbell added: “Whilst we are unable to act for all HIGA applicants, we do consider that many of these policyholders may want to explore other avenues of redress, including through the FCA and the Financial Ombudsman Scheme.”

The Spirits Business has contacted Aviva and QBE for comment.

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

HIGA was established last month and 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.

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