Most UK insurers are refusing to pay out on claims for holiday cancellations arising from the foot-and-mouth crisis.

The majority of hoteliers are not covered under their consequential loss policies, leaving the industry facing losses estimated at £100m per week.

Americans are taking the £20m a week they usually bring to the UK elsewhere and British day-trippers, who bring £9m a year to country businesses, have also stayed away.

Hoteliers' claims are being refused due to an exclusion in insurers' business interruption policy wordings.

The clause only covers an outbreak of any “human” infectious or contagious disease.

Association of British Insurers (ABI) spokesman Malcolm Tarling said the majority of business interruption policies only covered damage to the building, such as fire

or flooding.

“The only exception would be where some businesses have cover for ‘denial of access', where customers cannot get to the hotel, but this is a very specialist policy,” he said.

People cancelling holidays could also be left out of pocket, as travel insurers decline claims.

Paul Ditmer, marketing manager for Columbus Direct, said that anyone who took out a policy after February 21, when the government announced the outbreak, would not receive payments on claims resulting from foot-and-mouth disease.

Travel insurers Boots and Bupa have also confirmed that they would not be paying out on such claims, as the foot-and-mouth disease is termed an “act of God”.

A spokeswoman for Norwich Union said the company would only pay out to customers due to travel to a quarantined area.

The British Tourist Authority says that, although a case of foot-and-mouth has been found in northern France, holiday bookings on the continent are so far unaffected.