Questions over the responsibility of insurers when it comes to business interruption policies have been a matter of extreme contention in the insurance sector since the outbreak of the coronavirus (COVID-19) pandemic. Now the litigation law firm Mishcon de Reya LLP (Mishcon) is advising the newly formed group Hospitality Insurance Group Action (HIGA) to hold insurance companies to account for business interruption policies.
This hospitality sector-wide action group is being launched today to hold insurance for policy pay-outs arising from COVID-19 and lockdown related losses. HIGA is open to businesses which have been forced to close within the hospitality sector, if their insurance companies have been non-communicative or refusing to honour policies relating to business interruption due to this pandemic and the lockdown.
Mishcon has agreed to advise HIGA on the parameters of bringing a collective group action against a range of insurers. Any collective claim against the insurance industry would be likely to run into tens of millions of pounds due to the extent of members’ financial damage. Mishcon has secured external funding to cover the policy review exercise and is working with Philip Edey QC, of Twenty Essex Chambers. Mishcon will be reviewing the existing business interruption insurance policy of each hospitality business registered with HIGA.
Partner and head of the insurance disputes practice at Mishcon, Sonia Campbell, said that hospitality sector businesses have been hit particularly hard by the enforced lockdown precipitated by the pandemic and need to mitigate their losses.
“In times of crisis they expect their insurance to respond, “she said. “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."