Covid-19 Business Interruption Claims

If your business interruption insurance didn’t pay out during the Covid-19 pandemic, you’re not alone. Many valid claims were wrongly denied or delayed, and there’s still time to challenge those decisions.

At Hugh James, we’ve led the way in challenging insurers who failed to pay out valid business interruption claims. We’ve supported hundreds of clients, particularly in the hospitality and leisure sectors, whose legitimate claims were wrongly delayed or denied. From a landmark High Court victory for a Michelin-starred Welsh restaurant, to winning a pivotal Court of Appeal judgment benefitting thousands of policyholders, and a £7.5 million arbitration victory for hair and beauty salons, our track record speaks for itself.

Key contact

Erich Kurtz

Partner

Erich is a Partner in our Financial Mis-Selling team. He specialises in complex multi-claimant litigation, with a strong track record of leading policyholder business interruption claims and both professional negligence and financial mis-selling group actions.

Why choose Hugh James?

Sector expertise: We work with businesses of all sizes, especially those hit hardest by the pandemic, from pubs and hotels to care homes and gyms.
Proven results: We’ve helped clients recover substantial sums under complex insurance policies.
No win, no fee: We’ll handle your claim at no cost to you unless we’re successful.

What we can help with

Our legal team supports businesses through every stage of the business interruption claims process, including:

Policy review: Assessing your policy wording to identify potential cover.
Challenging rejected claims: Using our expertise to dispute insurer refusals.
Claim preparation: Helping you gather and present the right financial evidence.
Negotiation and settlement: Engaging with insurers to secure fair compensation.
Litigation support: Representing you in court if a fair outcome can’t be reached.

Can I still make a claim?

Yes, and you may still have a strong case, even if:

Your claim was previously rejected
You didn’t submit a claim at the time of the disruption
You’ve never had your policy wording properly reviewed
You’re unsure whether your policy provides cover

While many claims are still valid, there is a time limit. In most cases, the deadline to bring a business interruption claim is March 2026, so it’s important to act now to protect your position.

Most companies recognise the importance of having comprehensive business insurance coverage to safeguard themselves against various risks and uncertainties. Within these insurance policies, there is typically a component that provides compensation in the event of a business interruption, regardless of the cause. While physical damage to premises from incidents like fires or storms commonly triggers such coverage, it’s worth noting that many policies extend coverage beyond instances of physical damage. They also respond to situations where interruptions occur due to other factors or perils. This broader coverage ensures that businesses can receive financial support and assistance even in scenarios where physical damage may not be the sole cause of the interruption.

Business interruption claims involve seeking compensation for financial losses resulting from significant disruptions to your business operations. These disruptions can arise from various events, and insurance policies vary in their coverage and requirements.

Business interruption insurance can provide coverage for various aspects, including:

Profits: Compensation based on the business’s previous months’ performance, ensuring financial stability during the interruption.
Fixed Costs: Coverage for operating expenses and other necessary costs incurred while the business is temporarily unable to operate.
Temporary Relocation: Reimbursement for the expenses associated with moving to and operating from alternate premises during the interruption.
Wages: Support for paying employee salaries and wages during the period when the business cannot operate.
HMRC Taxes: Ensuring the business can fulfil its tax obligations on time, helping to avoid penalties or financial difficulties.
Loan Repayments: Coverage for monthly loan repayments, allowing businesses to meet their financial obligations even when income is affected.
Other Expenses: Reimbursement for reasonable and essential expenses that enable the business to continue its operations during the interruption.

These coverages aim to provide financial stability, minimise disruptions, and help businesses navigate challenging times by mitigating the impact of the interruption on their cash flow and overall financial health. The specific coverage and terms will vary depending on the insurance policy and the business’s individual needs and circumstances.

If a company facing financial distress holds a valid business interruption insurance policy, creditors may have the opportunity to make claims related to the impact of the coronavirus pandemic. Following a decision by the High Court, administrators or liquidators of insolvent businesses should thoroughly examine the insurance policies held by the company to determine if a claim can be pursued against the insurer for business interruption. A successful claim would result in improved dividends for the creditors of these businesses. Secured creditors should communicate with the insolvency practitioner to inquire about the existence of such a policy and assess whether it forms part of the security portfolio, potentially influencing their position.

Even if you made the voluntary decision to close your business without being explicitly instructed by the government, you may still be eligible to make a claim for business interruption. Numerous businesses chose to suspend operations due to concerns and apprehension among customers and clients about the pandemic, which can be considered a reasonable response. Additionally, certain business types may have faced challenges in implementing and adhering to social distancing measures and the two-meter rule, leading them to prioritise the safety of their staff and customers by closing down. In such cases, a valid claim for business interruption may arise.

Under a conditional fee agreement, you don’t pay any legal fees unless your claim is successful. If your case is successful, some of your legal fees may be recovered from your opponent, and the remaining fees will be deducted from your compensation at an agreed percentage. There are no hidden costs, and we’ll explain everything clearly before you proceed.

To obtain copies of your insurance policy documents, including the schedule, certificate, and booklet, it is necessary to contact your insurance company directly. As per legal obligations, insurers are required to provide these documents upon request. Reach out to your insurance provider and make a formal inquiry to obtain the necessary policy information. This will enable you to review and understand the terms, coverage, and conditions outlined in your insurance policy. Being familiar with the details of your policy will help you make informed decisions and ensure you have a clear understanding of your insurance coverage.