Earlier this week the Financial Conduct Authority (FCA) announced that eight insurers would take part in the High Court test case next month to clarify whether they should pay out on business interruption claims related to the Coronavirus pandemic.
Since originally announcing the action at the beginning of May, the FCA said it had approached 56 insurers; and reviewed more than 500 relevant policies from 40 insurers.
From that review, the watchdog identified a sample of 17 policy wordings that 'capture the majority of the key issues that could be in dispute' from a pool of 16 insurers, eight of whom have been asked to take part in the court case.
They are: Arch Insurance, Argenta, Ecclesiastical, Hiscox, MS Amlin, QBE, RSA and Zurich.
The announcement has led to significant voices in the industry calling on policy holders in the sector, who have had their business interruption claims rejected, to check the wording of their policies against the FCA's sample so as to ensure their wording is captured in the test case, and the interests of the sector are fully represented.
The FCA has given policy holders until 3pm this Friday (5 June) to comment on the representative sample.
Trade body UKHospitality says it has partnered with leading international law firm Taylor Wessing in relation to the FCA action.
It says this legal expertise will add further valuable resources, as the organisations consider how the FCA court action impacts on the business interruption insurance claims of policy holders in the hospitality sector.
“The FCA’s process for this action is moving at warp speed," says Richard Bursby, a partner at Taylor Wessing.
"This is necessary so that policy holders can quickly understand their position once the court clarifies some of the key issues around what is covered. The FCA are aiming for a hearing in mid-July. However, policy holders have just days to review their policies against the FCA's representative sample.
"Taylor Wessing is proud to assist hospitality in this initiative, as legal experts in a sector that has been hardest hit hard by the pandemic and currently has had little by way of insurance pay-out.”
UKHospitality adds that the insurance sector has rejected the vast majority of hospitality firms’ claims against business interruption policies, leaving many companies on the brink of financial ruin.
“So many stakeholders have come together on this crucial matter," says UKHospitality cheif executive Kate Nicholls.
"We now have a final sprint towards the deadline, to make sure that hospitality’s insurance plight is properly heard."
The trade body is also supporting Black and White Hospitality’s crowdfunding venture to have hospitality cases reviewed for challenge, which is being led by the group's legal director Rob Atkinson.