The new Hospitality Insurance Group Action (HIGA) will now represent hospitality businesses across the pub, restaurant, hotel and bar sector that have been forced to shut.
Any collective claim by HIGA against the insurance industry is likely to run into tens of millions of pounds, according to the group.
HIGA will now be advised by litigation law firm Mishcon de Reya LLP (Mishcon), who will offer guidance on the parameters of bringing a collective group action against a range of insurers.
Mishcon has secured external funding to cover the policy review exercise and is working with Philip Edey QC of Twenty Essex Chambers.
Sonia Campbell, partner and head of the insurance disputes team at Mishcon, said: “Hospitality sector businesses, large and small, have been particularly hard hit by the government-enforced closure during this pandemic and desperately need to mitigate their losses.
“In times of crisis they expect their insurance to respond, 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 policies.”
She added: “This strikes us as something that is open to challenge. I look forward to assisting all members of HIGA in exploring the possibility of a group claim.
“There may well be some light at the end of this industry’s very dark tunnel.”
HIGA registrant Dan Fox, managing director of Craft Locals, said: “If insurers don’t come through, this will have a devastating impact on not only the business and its continued survival, but the livelihood of the fantastic team members that we employ, and the local communities of which we form such an integral part.”