Wednesday 29 April 2020 3:20 pm

Hospitality class action group launches to bring business interruption insurance claims

A group action for the hospitality sector launched today with the aim of bringing claims against insurers which have failed to pay coronavirus-related business interruption claims.

The hospitality insurance group action (HIGA) is open to businesses such as pubs, restaurants, hotels and nightclubs which have been forced to close because of the lockdown and are facing insurers refusing to pay out on business interruption claims.

Read more: Hiscox warns of $175m coronavirus insurance hit

The claim is being run by law firm Mishcon de Reya which is also handling a group action against insurer Hiscox on behalf of aggrieved policyholders who argue the company should honour their business interruption cover.

Mishcon said it had received external funding to bring the claim and said it was working with Philip Edey QC, of Twenty Essex Chambers.

The firm said any collective business interruption insurance claim by the group is likely to run into the tens of millions of pounds.

Trevor Ayling, owner of five Renoufs Cheese and Wine Bars in Dorset and Hampshire and HIGA registrant said: “In light of the difficult circumstances, we decided to claim on our insurance policy and have tried every way to get our insurer to respond – to no avail. A pay-out on our policy would go some way to making reopening a reality, helping to secure Renoufs’ future.”

Read more: Insurers accused of not ‘sharing the pain’ with businesses during coronavirus pandemic

Fellow HIGA registrant Dan Fox, managing director of Craft Locals (owner of three north London pubs), said: “If insurers don’t come through, this will have a devastating impact on not only the business and its continued survival, but the livelihood of the fantastic team members that we employ, and the local communities of which we form such an integral part.”

Sonia Campbell, partner and head of insurance disputes at Mishcon, said: “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.”