The Night Time Industries Association (NTIA) announced it is coordinating action to be taken against Hiscox over claims it has misled customers in light of the pandemic.
According to The Guardian, more than 100 nightclubs, pubs and bars are planning coordinated legal action over its non-payment of business interruption insurance claims.
Hiscox allegedly sold policies before the pandemic hit the UK, stating it would pay out when a business was forced to shut owing to a notifiable disease.
Business owners have filed claims to Hiscox and other commercial insurers only to be told their business interruption policies do not cover the pandemic.
Michael Kill, CEO of the NTIA, said: “Businesses are being denied legitimate insurance claims, many claims are being disputed by insurers based on contrived arguments to avoid sharing the financial burden during the Covid-19 crisis.”
Paul Daly, the owner of Roadtrip and The Workshop bars and a member of the NTIA, told The Guardian he had paid £18,000 a year for his business interruption insurance policy with Hiscox, which he believed included cover for government-imposed shutdowns during a pandemic.
Despite his venue closing on 17 March, his claim with Hiscox was turned down.
Daly said: “People’s livelihoods are at stake here. I’m worried. It shouldn’t have to be into this when I’ve spent tens of thousands of pounds on insurance. It’s like someone came into my bar and bought a drink and then I don’t give it to them.”
The group, which is being advised by the licensing industry barrister Philip Kolvin QC, is calling on more businesses to join its move against the insurer.
News of the potential action comes after Hiscox’s announcement yesterday (22 April) that 10,000 companies which had purchased cover for business interruption had been directly impacted by the government-imposed closures.
However, it claimed its small core small commercial package policies did not provide cover for business interruption as a result of the government measures against the pandemic.
In a statement, the insurance giant said: “A number of UK policyholders have disputed the application of their policy in relation to business interruption. Hiscox recognises these are extremely difficult times for businesses and is determined to help provide greater certainty for customers.
“As a priority it will therefore work with the UK insurance industry, its regulators and its customers to seek means of expediting resolution through the range of independent mechanisms available.”