Fewer than one in 10 business interruption insurance policies held by hospitality operators are estimated to be liable to pay out following the landmark Supreme Court ruling, an industry insurance broker has warned.
Steven Swift of Sector Associates, which works with trade bodies including UKHospitality, said it was wrong to assume that "everybody is getting paid".
Last week the Supreme Court "substantially allowed" an appeal brought by the Financial Conduct Authority (FCA) in a legal battle to clarify whether certain policy wordings meant insurers should pay out for business interruption insurance related to Covid-19.
Around 370,000 businesses and 700 policies were potentially affected by the initial test case, but not all policies were included in the ruling.
Swift said: "The hospitality industry is in a critical condition and needs more government support, but please don't look at the headlines and think that everybody is getting paid. It simply isn't the case."
Sector Associates said that Hiscox, one of the insurers in the ruling, has written to brokers stating that "fewer than one-third" of its business interruption policies will provide cover.
Nick Griffin of the Licensees Association said: "It is imperative that policyholders review their insurance and claim where appropriate. But it's equally as important that insurers expedite the claims quickly now, as no further delays are justifiable when people's businesses are at risk. We know that this will only apply to a small number of operators and we urge understanding from landlords."
One legal expert involved in the case said that hospitality businesses should seek damages for late payment where cover applied.
Swift added: "If covered, insurers should pay quickly, including compensation for the delay. For some businesses, claim payments will be too late."
The complex Supreme Court ruling found that hospitality operators that had closed dine-in areas but remained open for takeaway had been unable to claim under 'inability to use' clauses, but the court ruled that insurers should pay out for the part of the business that was lost.
The FCA has published a list of business Interruption policy types that potentially cover the pandemic based on data they have collected from insurers.