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Night Time Industries Association criticises high court ruling on business interruption insurance

By Chris Cooke | Published on Tuesday 18 October 2022

The UK’s Night Time Industries Association has criticised a ruling made in the high court regarding business interruption insurance and the pay outs due to companies forced to shutdown at various points during the COVID-19 pandemic.

The high court yesterday ruled on three COVID-related disputes involving a number of insurers. Those disputes dealt with various grievances regarding the claims pubs, restaurants and other companies have made on their business interruption insurance policies.

The specific ruling criticised by the NTIA relates to the question as to whether an insurer can deduct from any pay out monies a policyholder received from the government during the pandemic, in particular via the furlough scheme. The high court ruled that those sums can be deducted.

Clubs, venues, bars and other hospitality businesses were hit particularly hard by the COVID lockdowns of course. And NTIA boss Michael Kill says yesterday’s ruling “sets a dangerous precedent, which will resonate in frustration and anger across the hospitality and night time economy sectors”.

“Many will be aggrieved to see insurers, who have placed so many in financial ruin over the business interruption challenge, wrongly being allowed to consider deducting the state support that a paid policyholder has received when deciding what to pay the businesses”, he adds.

“Confidence is at an all time low between the sectors”, he concludes, “and we feel strongly, alongside the industry, that this decision is unjust, [and] raises questions on whether these deductions should be returned to the state”.

Yesterday’s rulings are set to be subject to appeal.