Group members are seeking legal action against insurers QBE UK and Aviva for failing to pay out on coronavirus-related business interruption claims

The Hospitality Insurance Group Action (HIGA), representing hotels, restaurants, bars, pubs and nightclubs that were forced to close as a result of government advice surrounding the coronavirus outbreak, has been granted the right to intervene in the FCA’s July test case, which is planned to explore the clarity and intention of business interruption (BI) policy wordings in light of the ongoing Covid-19 pandemic.

Advised by law firm Mishcon de Reya, which is also acting for similar policyholder collective the Hiscox Action Group (HAG), HIGA is specifically targeting insurers QBE and Aviva for refusing to honour policies relating to BI losses due to the Covid-19 pandemic and associated lockdown.

In May, Mishcon de Reya confirmed this course of action after reviewing more than 500 BI policies, submitted by applicants between 29 April and 6 May 2020.

The relevant policy wordings for Aviva customers relates to its ‘Material Damage and Business Interruption Policy’.

The applicable QBE policy wordings, on the other hand, are PHOT010419 (hotel insurance policy), PLSC010419 (leisure combined), PBCC170619 (business combined insurance policy) and PNML010119 (nightclub and late-night venue policy).

On 26 June, the High Court awarded HIGA the right to intervene with the FCA’s test case; the HAG has also received this permission.

HIGA is represented by Sonia Campbell, partner and head of the insurance disputes practice at Mishcon de Reya.

Leading counsel, Philip Edey QC, of Twenty Essex Chambers represented HIGA at Friday’s second case management conference. The Counsel team also includes Susannah Jones of Twenty Essex Chambers and Josephine Higgs of 7 King’s Bench Walk.

Campbell said: “We’re grateful to the Court for allowing our application to intervene, to make submissions in the FCA test case hearing in July insofar as they are relevant to the QBE and Aviva policyholders for whom we act and represent; we are also grateful to the FCA for consenting to our application.

“Whilst Aviva is not a defendant to the proceedings, it underwrites a materially similar wording to the material damage and business interruption resilience wording that is being tested, which is underwritten by RSA.

“Our participation will enable us to ensure that points we wish to advance for our clients can be made in the way we wish to make them.”