A comprehensive review of over 500 business interruption insurance policies, submitted by Hospitality Insurance Group Action (HIGA) businesses between 29 April and 6 May 2020 has now been completed by our insurance team, led by Partner Sonia Campbell in conjunction with Leading Counsel, Philip Edey QC, of Twenty Essex Chambers.
It has been determined that the specific coverage clauses within policies underwritten by Aviva Insurance Limited and QBE (UK) Limited, are those which HIGA is best advised to challenge through a group claim. The relevant policy wording for Aviva Insurance Limited is its Material Damage & Business Interruption Policy. The relevant QBE policy wordings are: PHOT010419 (Hotel Insurance Policy), PLSC010419 (Leisure Combined), PBCC170619 (Business Combined Insurance Policy) and PNML010119 (Nightclub and Late Night Venue Policy).
HIGA is inviting any business in the hospitality industry not already registered with HIGA but which has sought to claim under its business interruption policy with QBE and Aviva and has thus far been ignored or thwarted, now to join HIGA by registering here before Friday 5 June 2020. Such businesses may include hotels, restaurants, bars, pubs, nightclubs and leisure businesses.
All existing HIGA registrants will be directly contacted to explain whether it is thought that their policies potentially offer coverage or not, however only those with the specific policies detailed above will be eligible to participate in the intended HIGA-led group action.
Commenting on the news Partner Sonia Campbell said:
"We were overwhelmed by the expressions of interest in bringing actions against insurers from within the hospitality industry – demonstrating how hard-hit this sector has been as a result of the government-enforced lock-down and how intransigent many in the insurance industry have been towards their policyholders.
“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. We wish this cohort every success.
"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.
“Meantime, we are contacting those HIGA applicants insured by Aviva and QBE and inviting them to confirm their continued interest in participating in a group claim.
“We also encourage any other businesses in this sector - with a specifically-worded business interruption policy underwritten by Aviva or QBE - to contact us by no later than Friday 5 June should they wish to consider participating in the proposed HIGA litigation. We believe this is the best way to ensure some financial recompense for these policyholders following their sudden and enforced closure."