Hospitality groups gear up to take on insurers over business interruption cover
Hospitality companies hit hard by the pandemic are forming groups to take on their insurers, in the hope of receiving business interruption cover they believe they are owed.
The hospitality businesses involved believe they are owned payouts from their insurers after the coronavirus and subsequent restrictions left them unable to serve customers for months at a time.
Morning Wire understands groups have been formed to potentially take legal action against insurers Axa, Aviva, Alliance, RSA, Tokio Martine and NFU, some of which contain more than 50 members.
A group of 18 policy holders, including Black & White Hospitality, are in the process of taking on their insurer Tokio Marine.
Working as a group action, the 18 hospitality businesses are hoping to take Tokio Marine to court for £1m.
Rob Atkinson, an in-house lawyer at Black & White Hospitality said it was “disappointing” the insurer had not paid out on their business interruption claim.
He said Black & White Hospitality, which operates the Marco Pierre White group of franchised restaurants, had paid around £500,000 to Tokio Marine in premiums.
Atkinson said the insurer did not think the group had the necessary coverage to obtain the business interruption cover, and suggested arbitration. However, Atkinson said he felt there was a case and that they should go to court.
Tokio Marine said it was working up ensure “fair payment of all valid business interruption claims triggered by Covid-19 in line with the FCA test case judgements.”
They added: “While we do not comment on individual claims, we sympathise with all our clients at what we know remains a very difficult time and our aim is to always be fair and expeditious in our processing of their claims.”
Elsewhere, Inception Group, owner of London nightclub Bunga Bunga, along with Corbin & King, owner of upmarket eatery The Wolseley are among those taking Axa to court to try to get the insurer to pay out on business interruption cover.
Inception Group has alleged Axa is trying to “wiggle out” of making a payout, and plans to launch a £3.25m claim in the High Court.
Meanwhile Corbin & King chief executive Jeremy King told the Financial Times: “There is a great deal of anger in the trade that we’ve paid substantial premiums and [when] we need that support we’ve been denied it.”
Morning Wire understands the pair are in talks to take action together.
An Axa spokesperson added: “The FCA Test Case considered these wordings in great detail and decided that those in line with the Axa wordings did not provide any cover. The decision was sufficiently clear for the FCA to decide not to appeal against the decision on these wordings, although they did appeal a number of other points relevant to different policies.
“Whilst we understand the challenging situation many businesses have faced, we feel it is wrong to try to suggest a different outcome from an appeal judgment that very specifically didn’t include these policies.
“Axa will continue to work with our customers and pay claims on policies where there is valid cover, as we have been from the start of the pandemic. To date we have already paid claims totalling above £65m demonstrating that where cover is in place claims have been, and will continue to be, settled by Axa.”