By: 21 May 2020
Hospitality group targets insurers over Covid-19 claims

Another action group has formed to take on insurers that have rejected Covid-19 claims on business interruption policies—this time hospitality businesses against QBE and Aviva.

Bell Yard Communications, a boutique London-based litigation and legal PR agency, has established and is administering HIGA. Mishcon de Reya, which is already advising the Hiscox Action Group, is pursuing this case on behalf of business interruption insurance policyholders.

Mishcon de Reya and Philip Edey QC of Twenty Essex Chambers have completed their comprehensive review of more than 500 policies, submitted by applicants between 29 April and 6 May.

HIGA is now inviting only those policyholders with QBE and Aviva and specified types of policy wordings to confirm that they remain interested in participating in a funded group claim. They must do so by 5 June.

The group is also calling on hotels, restaurants, bars, pubs, nightclubs and leisure businesses that unsuccessfully sought to claim for Covid-19 disruption under business interruption policies with QBE and Aviva to consider joining.

Sonia Campbell, partner and head of the insurance disputes practice at Mishcon de Reya, said the decision to limit a potential HIGA legal challenge to just two insurers with specific wordings “was always going to be difficult”.

“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 lockdown and how intransigent many in the insurance industry have been towards their policyholders.”

“[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 (Financial Conduct Authority) 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.”

Mishcon de Reya is in discussions with third-party funders to secure funding for the costs of this litigation and expects to be able to move forward by 10 June, with the aim of issuing a claim as soon as possible.

Hiscox Action Group, which Mishcon de Reya is also advising, is seeking a reported £40 million from insurer Hiscox, to be shared between more than 400 members with rejected Covid-19 claims. Litigation funder Harbour is believed to be financing the litigation.