QBE and Aviva BI policies in the sights of action group virus claims

The recently formed Hospitality Insurance Group Action (HIGA), created to pursue business interruption (BI) claims for virus-related losses suffered by companies in the UK hospitality sector, has decided to focus its efforts on policies issued by Aviva and QBE, advising policyholders to sign up by 5 June. The HIGA announced that its legal advisers Mishcon de Reya, in conjunction with leading counsel Philip Edey QC of Twenty Essex Chambers, have completed their review of more than 500 BI policies submitted by applicants between 29 April and 6 May 2020, to help decide which policies to focus on. The action group said the legal team has determined that the most vulnerable wording for Aviva is its Material Damage & Business Interruption Policy. The relevant QBE policy wordings are: PHOT010419 (Hotel Insurance Policy), PLSC010419 (Leisure Combined), PBCC170619 (Business Combined Insurance Policy) and PNML010119 (Nightclub and Late Night Venue Policy). The HIGA said it will now write to all its applicants, inviting only those policyholders with these insurers and specified types of policy wordings to confirm they remain interested in participating in a funded group claim. “HIGA is also inviting any business in the hospitality industry not already registered with HIGA but which has sought to claim under its business interruption policy with QBE and Aviva and has thus far been ignored or thwarted, now to join HIGA. Such businesses may include hotels, restaurants, bars, pubs, nightclubs and leisure businesses,” explained the group. “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 have been towards their policyholders,” said Sonia Campbell, partner and head of the insurance disputes practice at Mishcon de Reya. “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. However, we have sought to protect their rights by contacting the FCA on their behalf, potentially affording them the opportunity to engage with the test case the FCA is to bring against as-yet-unspecified insurers. We wish this cohort every success,” she continued. Ms Campbell added that, while the firm is unable to act for all HIGA applicants, she urged many of these policyholders to explore other avenues of redress, including through the FCA and the Financial Ombudsman Scheme. “In the meantime, we are contacting those HIGA applicants insured by Aviva and QBE and inviting them to confirm their continued interest in participating in a group claim. We also encourage any other business in this sector – with a specifically worded business interruption policy underwritten by Aviva or QBE – to contact us by no later than Friday 5 June, should they wish to consider participating in HIGA’s group action. We believe this is the best way to ensure some financial recompense for these policyholders following their sudden and enforced closure,” she added. Mishcon de Reya said it is in discussions with third-party funders to secure financing for the litigation costs and expects to be able to move forward by Wednesday 10 June, with the aim of issuing a claim as soon as possible after that.

QBE and Aviva BI policies in the sights of action group virus claims

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