Campaign launched to force insurers to honour business interruption clauses

By Joe Lutrario

- Last updated on GMT

Crowdfunding to force insurers to honour business interruption clauses launched

Related tags Legal action Hotels Casual dining Fine dining Coronavirus

A crowdfunding campaign has been launched to fund support and possible legal action over many insurers refusal to pay out for business interruption during the Coronavirus pandemic.

The campaign is led by Black and White Hospitality legal director Rob Atkinson and is initially supported by Best Western Hotels, Vine Hotels and trade body UKHospitality.

It is billed as a campaign by hospitality, for hospitality, with other businesses and organisations from the sector invited to join and share the message.

The crowdfunding campaign aims to raise enough money to initiate a three-phase plan to support hospitality businesses who have had claims rejected.

Phase one will see a review of policies and insurers’ reasons for declining claims, followed by the preparation of advice on coverage under each category of policy.

Phase two will involve a focus on pre-action representation with formal letters being sent to insurers setting out the position on coverage. Their responses will then be reviewed and reported with settlement, in principle, being attempted.

If phase two fails to bring immediate results, phase three will be implemented in the form of litigation.

Following the Government’s announcement on 20 March, hospitality businesses have been forced to close until further notice.

Despite having taken out policies in good faith, many businesses have had business interruption insurance claims rejected by insurers, the campaign’s website states. 

“The impact of the Covid-19 crisis on the hospitality sector was immediate and it was devastating. Pubs, bars and hotels were one of the first high profile casualties as the Government ordered venues to close,” says UKHospitality chief executive Kate Nicholls.

“Businesses have understandably looked to the insurance sector to honour policies that have been taken out in good faith and have been flatly rejected. This is an existential crisis for many in the hospitality sector and it will be the death of businesses if they do not get the support they are due.”

“The response from insurers has come as a dreadful shock, but we must refuse to accept the unacceptable,” adds Atkinson, who has 15 year’s experience as in-house lawyer.

“We have held lengthy discussions with a leading law firm which specialises in policy disputes and they have confirmed that, for some policies, there would be strong grounds to challenge the insurer’s position.”

“The coronavirus crisis should not be just a problem for the Government to deal with while the insurance companies get away with offering limited, or often no, assistance.”

Business that wish to have their specific policy reviewed are asked to make a donation of £200 to the fund. Businesses, or anyone with an interest in hospitality, that wish to support the campaign generally are asked to donate whatever they can afford.

The donated funds will be held by a legal-specific, fully-regulated crowd fund page called CrowdJustice and any surplus funds generated will be donated to charity.

The crowdfunding page can be found at here. 

Earlier this month​ the Night Time Industries Association (NTIA) announced it will be coordinating claims against the insurer Hiscox for refusing to pay out under its business interruption policy in relation to the Coronavirus crisis.

The association’s CEO Michael Kill has instructed industry barrister Philip Kolvin QC to advise its members on their rights under their insurance policies, and to challenge Hixcox’s insurance claim denial.

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