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Group action launched against Aviva and QBE insurers

By Emily Hawkins contact

- Last updated on GMT

Collective effort: Hospitality Insurance Group Action (HIGA) has selected two insurance companies to launch group action against
Collective effort: Hospitality Insurance Group Action (HIGA) has selected two insurance companies to launch group action against

Related tags: Coronavirus

Insurance companies Aviva and QBE (UK) Limited have been chosen as the focus of an action group that intends to launch a group claim against insurers refusing to pay out to pubs for loss of income during the coronavirus crisis.

The Hospitality Insurance Group Action (HIGA) is legally advised by Mishcon de Reya, the law firm behind a campaign for licensed taxi drivers against ride-sharing app Uber and group action against Google.

A survey from the British Beer & Pub Association, published at the start of this month, found the majority of publicans have struggled with insurance claims​. Some 67% of publicans have had claims for business interruption insurance claims rejected. 

Aviva and QBE’s policies have been identified for this action because the group believes it has a good chance of successfully winning a claim owing to their wordings.

Hard-hit sector

Sonia Campbell, partner and head of the insurance disputes practice at Mishcon de Reya, said the level of enquiries from pub and restaurant operators was proof of the desperate situation faced by the sector.

She said: “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 has been towards their policyholders.

“The decision to limit a potential HIGA legal challenge to just two insurers with specific wordings was always going to be difficult and we recognise many HIGA applicants will be disappointed we are unable to act for them.”

Operators with policies under different insurers were encouraged to pursue the issue by contacting the Financial Conduct Authority (FCA) and the Financial Ombudsman Service.

Campbell called on other pub businesses with specifically worded business interruption policies from Aviva or QBE to get in touch by Friday 5 June if they wish to participate in the group action.

Not covered

Campbell added: “We believe this is the best way to ensure some financial recompense for these policyholders following their sudden and enforced closure.” 

Mishcon hopes to have third-party funding in place by 10 June to commence proceedings during July.

Aviva told The Financial Times​ that its “standard terms and conditions for business interruption do not cover claims relating to the current pandemic”. 

It said a minority of its customers “may have purchased cover through a broker or scheme that is not on Aviva’s standard terms and which may provide cover”. 

Publicans have shared their frustrations with unsuccessful claims for insurance payouts with this magazine over the past few weeks.

Luddite Brewing Company director Tim Murphy responded to his insurer’s stipulation that the Government’s shutdown of pubs was not covered by its policy relating to “local damage”, describing it as an attempt to find “ingenuous ways to avoid helping anyone.”

Another operator, David Strange, told The Morning Advertiser​ of his despair at the refusal of another insurer to pay out​, with the insurer also citing a ‘25-mile radius’ criteria for diseases to be covered by its policy.

The FCA said it intended to obtain court declarations aimed at resolving contractual uncertainty in selected business interruption insurance policies.

Read the latest digital edition of The Morning Advertiser​ – for free – by clicking here​.

Related topics: Legislation, UnitedWeStand

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