Today’s Business Interruption insurance test case judgment handed down by the High Court has brought relief to thousands of businesses in the hospitality sector who have Resilience (Marsh/JELF) and QBE 1 policy wordings.
The result of the judgment will mean that thousands of hospitality businesses should be one step closer to moving forward with their Business Interruption claims with a view to obtaining the appropriate pay outs.
Sonia Campbell says, “I am delighted with today’s judgment and what this means for many thousands of policyholders. We identified at the very outset that many of these policies covered Covid-related losses, and the judgment is a vindication of our position. For many hospitality businesses in particular, having their insurers pay out on their Business Interruption insurance policies is a matter of survival.
Without this judgment, even more businesses will have been forced to the wall. The judgment means that many policyholders are a step closer to recovering losses from insurers. We do anticipate that insurers will apply for permission to appeal but we hope they will do the right thing and now start paying claims.”
Insurers had been refusing to pay out on Business Interruption insurance policies that the FCA, HIGA – and now the Court – believes should have been triggered when many hospitality businesses were forced to close due to Covid-19 and the Government’s lockdown measures in response.
The aim of the test case was to provide clarity on the extent to which UK businesses would be covered under a range of Business Interruption insurance policies. Over the duration of the case, the Court has received legal submissions in relation to the business interruption policies of eight major insurers.
Hospitality Insurance Group Action (HIGA) was just one of two policyholder groups granted permission by the High Court to make submissions as part of the test case. HIGA has been at the forefront from the very beginning, representing Aviva (Resilience Marsh/JELF wording) and QBE policyholders.
The hospitality sector has been devastated by the Covid-19 pandemic as the Government’s lockdown forced hotels, restaurants, cafés, pubs, and other hospitality establishments to close. Now many hospitality businesses can breathe a sigh of relief as today’s judgment moves them a step closer to recovery from insurers.
The judgment is likely to have massive consequences for the entire insurance industry. The Aviva “Resilience” policy, for example, was produced by Marsh/JELF and then used by many other insurers – at least up to a dozen different insurers. It now leaves those other insurers equally exposed to claims by their Resilience policyholders.
Given the successful outcome, HIGA would now like to hear from all Resilience Marsh/JELF policyholders who have the same policy wording as the RSA4/Aviva wording, as well as from all QBE policyholders who have the QBE1 25 mile disease wording – irrespective of business sector.
Sonia Campbell adds. “Insurers have now asked for more time to apply for permission to appeal which suggests that insurers will seek to continue to contest coverage despite the Court’s clear judgment. Any business insured through the Resilience Marsh/JELF wordings or the QBE1 (25 mile) disease wordings should feel free to contact us to consider next steps. Our claim funded by one of the world’s largest litigation funders”.