Top insurers such as AXA, RSA, QBE and Zurich face a potential multi-million-pound lawsuit from British pubs, hotels, restaurants and leisure groups, who allege that legitimate business interruption claims have been rejected.


A new Hospitality Insurance Action Group (HIGA) on Wednesday issued a “call to arms” to the sector to step forward and have their policies checked for free in the latest move to tackle insurers over their response to the coronavirus pandemic.The most stringent government lockdown in peacetime history, ordered in March to slow the spread of a disease that has caused more than 24,000 British deaths to date, has left businesses struggling for survival and the economy facing a deep recession.


Lawyers at Mishcon de Reya — who are already advising a separate action group against Hiscox, a leading insurer of small-and-medium-sized businesses — said the hospitality sector had been particularly hard hit by the lockdown.


“In times of crisis, they expect their insurance to respond,” said Sonia Campbell, the head of the insurance disputes practice at the firm.


“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 (BI) policies.”


Trevor Ayling, the owner of five Renoufs Cheese and Wine Bars in Dorset and Hampshire, in western and southern England, said he had registered with HIGA because he did not have the money to fight his insurers after they ignored or denied his claims.


“A pay-out on our policy would go some way to making reopening a reality, helping to secure Renoufs’ future,” he said.


Any successful claim will hinge partly on whether the lockdown triggers a clause in business interruption policies designed for insured premises that cannot be used because of restrictions imposed by a public authority, experts say.


The Financial Conduct Authority (FCA) said earlier this month that most insurance policies bought by smaller British companies do not cover the coronavirus-related disruption, but that those that do should pay out quickly.


AXA, RSA and Zurich said on Wednesday that very few businesses would have BI cover that would extend to the pandemic, but that they were paying valid claims.


QBE also said it was paying valid claims and that its policies did not cover a global pandemic where general movement and business restrictions had been imposed by national governments.

Mishcon de Reya said it hoped to review insurance policies by the end of May before assessing how best to bring a fully-funded group claim.


Across the Atlantic, restaurants and other companies have already filed class action lawsuits.


Meanwhile, at least three more groups of UK policyholders are considering a lawsuit against Hiscox.


Hiscox said last week it would work with the industry, regulators and customers to “seek means of expediting resolution through the range of independent mechanisms available.”


Law firm Fieldfisher also said it was advising policyholders with RSA, QBE and Lloyd’s of London insurer Argenta.


Argenta said it was committed to paying all valid claims.