Take action to avoid missing COVID-19 BI limitation deadline

In brief

The six-year limitation period for COVID-19 business interruption (BI) claims is fast approaching, meaning many claims will soon be time-barred if not pursued.
As recently issued claims indicate, despite the Supreme Court's 2021 decision in the FCA Test Case and subsequent guidance from the Financial Conduct Authority, many claims have still not been validly settled by insurers.
Key legal issues also remain in question, including the treatment of furlough payments when calculating BI loss.
Businesses with denied or unresolved COVID-19 BI claims should urgently seek advice to avoid missing the limitation deadline.

Introduction

It may feel as though the insurance litigation arising out of the COVID-19 pandemic has been never ending (indeed, the court itself made this observation in Bath Racecourse Company Ltd & Ors v Liberty Mutual Insurance Europe SE & Ors [2025] EWHC 1870 (Comm), discussed by us in further detail here). However, an end is in fact drawing nigh, at least insofar as new actions are concerned: with the six-year anniversary of the beginning of the pandemic fast approaching, many COVID-19 BI claims will soon be time barred.

This means that if affected policyholders do not act soon, claims against their insurers could be lost. It is therefore imperative that those businesses which have had claims denied, or which are still awaiting definitive comments on coverage from their insurers, urgently consider their position.

Are new COVID-19 BI claims still being issued?

In January 2021, shortly after the Supreme Court handed down its judgment in the FCA Test Case, the Financial Conduct Authority (FCA) issued a "Dear CEO" letter to insurers. The FCA made its expectations clear: insurers were to "reassess and settle claims quickly" in light of the Supreme Court’s findings, and to make interim payments where appropriate. This was intended to ensure policyholders affected by COVID-19 BI had their claims processed fairly and without unnecessary delay.

Despite this guidance having been issued more than four years ago, it is evident that there are still BI claims that have not been validly settled by insurers. Many policyholders continue to face challenges in obtaining payments, with disputes persisting over policy interpretation, quantum, and the application of the Supreme Court’s judgment.

This ongoing uncertainty means that new legal actions continue to be brought by affected businesses. As reported by the BBC, 69 small business owners have very recently taken group legal action against the Beazley Group. The claimants allege that, contrary to the Supreme Court ruling and FCA guidance, Beazley continues to refuse to pay valid BI claims. The businesses involved range from restaurants to retailers. They argue that Beazley’s refusal to settle claims has had a significant financial impact and are looking to recover the insurance sums they say are due to them.

Further, in what appears to be the most recent COVID-19 BI litigation to be issued, as reported by Law360 last month (subscription required) various colleges of Oxford University brought a claim for their BI losses against their insurer, Aviva. Mishcon de Reya has been instructed to act for the colleges in their attempt to seek redress for losses incurred during the pandemic. This action highlights the ongoing challenges faced by a variety of different entities in securing BI claim settlements.

Who can bring a claim?

It is therefore clear that there are still policyholders who have not yet received payment for valid BI claims and who consequently may still have recourse to legal action against their insurers.

Earlier this year, to mark the impending fifth anniversary of the pandemic, we provided guidance on the various issues that have now been decided by the court in relation to COVID-19 BI claims. However, legal debate continues over what was covered by the contemporaneous insurance policies. Just this year, in the various decisions on the action brought by Bath Racecourse (and others) against their BI insurers, it has been held that:

Insurers can deduct furlough payments when calculating a policyholder's BI loss (in Liberty Mutual v Bath Racecourse [2025] EWCA Civ 153) (although leave to appeal this decision to the Supreme Court has been granted, and it is possible that the issue may not have been fully determined before the limitation deadline has passed);
In composite policies for groups of companies, an "any one claim" limit applies to each of the separate group entities (also in Liberty Mutual v Bath Racecourse [2025] EWCA Civ 153);
Private regulatory bodies such as the British Horseracing Authority and the Greyhound Board of Great Britain could be "competent authorities" for the purposes of prevention of access and hybrid clauses (in Bath Racecourse Company Ltd & Ors v Liberty Mutual Insurance Europe SE & Ors [2025] EWHC 1870 (Comm));
In "composite" policies (covering numerous sites) with an "any one loss" limit, a separate loss calculation should be carried out for each measure or action that imposed or materially increased restrictions, as well as for each covered facility (also in Bath Racecourse Company Ltd & Ors v Liberty Mutual Insurance Europe SE & Ors [2025] EWHC 1870 (Comm)).

What should potential claimants do next?

If your business was impacted by COVID-19 from the beginning of the pandemic and you have had a BI claim denied by your insurers, now is the time to obtain advice on whether you might be able to bring a claim against them. Potential claimants should not delay in sending the appropriate pre-action correspondence to insurers, so that they are in a position to issue proceedings in early 2026, sufficiently far in advance of the six-year anniversary of the pandemic to avoid falling foul of any limitation issues.

The Insurance Disputes team at Mishcon de Reya are well placed to advise on all COVID-19 BI issues. Mishcon de Reya played a key role in the FCA Test Case, acting for over 400 policyholders insured with Hiscox (the Hiscox Action Group) as well as a group of SMEs in the hospitality sector. Mishcon de Reya represented Various Eateries at both first instance and in the Court of Appeal in Various Eateries v Allianz, and acted for a range of restaurants, rugby clubs, and hotels in Burger and Lobster Restaurant Group Limited & Ors v Allianz. Most recently, Mishcon de Reya has been instructed in connection with the latest COVID-BI action to be litigated, representing various of the colleges of the University of Oxford.