The Night Time Industries Association (NTIA) has claimed that big-name insurers including Hiscox have rejected "legitimate" claims for business interruption pay-outs made by hospitality operators, further adding to the industry's ‘turmoil' .
Michael Kill, chief executive of the NTIA, said that despite insurers having "crystal clear clauses" within their policy wording indicating "full coverage", several big-name insurers have refused to pay out. Kill has spoken of numerous instances where businesses had received "written confirmation of cover" from insurers, such as Hiscox, only to have their claim denied further down the line.
In a statement Kill said: "It is clear that denying pay-out for valid claims is unfair and, unless rectified, could result in the closure of hundreds of businesses.
"The leisure and hospitality industry are in turmoil. With the coronavirus pandemic still rife throughout the country, there is no definite indication as to when businesses within the night-time economy will be able to reopen. Many of these businesses have been left financially crippled by enforced closures, reliant only on the prospect of a business interruption insurance pay-out.
Kill said the NTIA had partnered with late-night insurance specialists NDML to raise awareness and "fight for fair treatment from insurers" and stressed that insurers had an obligation under Financial Conduct Authority (FCA) regulation to "treat customers fairly".
The FCA has now stepped in to examine points of contention within business interruption insurance policies to clarify whether these policies must provide cover. Its test cases are expected to be taken to court in the coming months.
Hiscox responded to the NTIA's claim saying: "We understand these are incredibly difficult times for businesses and we are paying claims that are covered by the policies we issue fairly and quickly. We review every case individually, and if any customer has concerns about the application of their policy, we encourage them to get in touch with us directly."
The spokesperson said that where the application of a policy is disputed, Hiscox's focus was on helping to provide customers with greater certainty and that a "fair and fast resolution" was in everybody's interests. Hiscox said it was working with the UK insurance industry, their regulators and customers to seek an "expedited resolution through the range of existing independent mechanisms."