Hospitality businesses have launched a campaign backed by legal experts in a bid to force the insurance sector to honour business interruption policies.
Led by Rob Atkinson, a leading hospitality lawyer from Black and White Hospitality, which operates the Marco Pierre White group of franchised restaurants and manages a portfolio of hotels across the UK, a crowdfunding campaign has been launched to take legal action against those insurers failing to pay out.
The campaign has already been supported by Best Western Hotels, Vine Hotels and UKHospitality, with other organisations invited to join or make a donation to have their policies reviewed.
Atkinson said: "The response from insurers has come as a dreadful shock, but we must refuse to accept the unacceptable.
"We have held lengthy discussions with a leading law firm which specialises in policy disputes and they have confirmed that, for some policies, there would be strong grounds to challenge the insurer's position.
"The coronavirus crisis should not be just a problem for the government to deal with while the insurance companies get away with offering limited, or often no, assistance."
The crowdfunding campaign aims to raise enough money to initiate a three-phase plan to support hospitality businesses who have had claims rejected.
Phase one will be a review of policies and insurers' reasons for declining claims, followed by the preparation of advice on coverage under each category of policy.
Phase two will focus on pre-action representation with formal letters being sent to insurers setting out the position on coverage. Their responses will then be reviewed and reported with settlement, in principle, being attempted.
If phase two fails to bring immediate results, phase three will be implemented in the form of litigation.
UKHospitality chief executive Kate Nicholls added: "The impact of the Covid-19 crisis on the hospitality sector was immediate and it was devastating. Pubs, bars and hotels were one of the first high profile casualties as the government ordered venues to close.
"Businesses have understandably looked to the insurance sector to honour policies that have been taken out in good faith and have been flatly rejected. This is an existential crisis for many in the hospitality sector and it will be the death of businesses if they do not get the support they are due."
Business that wish to have their specific policy reviewed are asked to make a donation of £200 to the fund. Businesses, or anyone with an interest in hospitality, that wish to support the campaign generally are asked to donate whatever they can afford.
The donated funds will be held by a legal-specific, fully regulated crowd fund page called CrowdJustice and any surplus funds generated will be donated to charity.
The crowdfunding page can be found here