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NTIA calls out the insurers shirking their responsibilities during the COVID-19 shutdown

By | Published on Monday 20 April 2020

Night Time Industries Association

The Night Time Industries Association has called out certain insurance companies which, it claims, are seeking to get out of paying monies due to clubs, bars and venues forced to close as a result of the COVID-19 shutdown. And that’s in scenarios where insurance policies clearly cover things such as forced closure caused by a pandemic.

Everyone operating in the live, hospitality and wider night-time sector has been busying reading the small print in their insurance policies ever since measures to restrict and delay the spread of COVID-19 were instigated by governments around the world. Plenty of polices will have included sneaky get-outs for things like pandemics, but the NTIA says that some insurers are being unhelpful even where that’s clearly not the case.

The trade group said last week that “many claims are being disputed by insurers based on ambiguous policy wording to avoid sharing the financial burden during the COVID-19 crisis. We have identified a number of insurers we believe are acting unfairly in these circumstances to protect their own interests and have gathered substantial support from the sector to fight these disputed claims”.

Among specific examples provided by the NTIA is wine bar company Vagabond, whose MD Stephen Finch says that it has a particularly “rigorous” insurance policy that “essentially stated that in the event we experience business interruption stemming from an occurrence of a notifiable disease within a 25 mile radius of a premises of ours, we would be eligible for our BI indemnity sum”. But, despite “clear cut” wording and “indisputable” facts, “I heard from our brokers that the insurer, Eaton Gate, has decided to deny all claims”.

Meanwhile, the MD of the Clapham Grand, Howard Spooner, says that – while he is still waiting to hear back from the insurer for his London venue – for a hotel and beach club he also runs on the Isle Of Wight his insurance claim has already been knocked back. The hotel’s policy, he says, “has the business interruption clause if we are forced to close by the government [but insurer] NFU Mutual have point blank refused to entertain any claim whatsoever”.

The CEO of the NTIA, Michael Kill, adds: “While we appreciate there are some clear cases where insurance claims within the night-time business sector are not legitimate, there are a considerable number of businesses who are being denied valid insurance claims … by certain insurers in the hope that the current financial situation will deter them from challenging the claim. These actions have not gone without notice and will be challenged at a greater scale in the coming weeks”.

In other news, the NTIA has again called on the government to instigate what it calls a ‘big freeze’ to help night-time businesses and their landlords weather the COVID-19 storm. If introduced, that policy would mean that “all financial commitments to banks in terms of mortgages, loans and financial agreements [would] be frozen [for a time], without effect on any current covenants or balances in terms of interest”.

Rent commitments for closed clubs, bars and venues are a major challenge for the night-time sector during the COVID-19 shutdown, the NTIA stressed, but at the same time it’s important to recognise that those businesses’ landlords face their own challenges. The big freeze strategy would help landlords to help tenants.

Having called for the big freeze policy to be adopted by government at the start of the month, the NTIA says it now has over 200 landlords and tenants from across its sector backing those calls. Kill added: “It is fantastic news to receive such unprecedented support from so many landlords and tenants across the UK, in such uncertain times”.

“We are, of course, all in this together which is why the NTIA and many British landlords are asking the Prime Minister and the Chancellor Of Exchequer to adopt the big freeze urgently”, he went on. “While the government has come an enormous distance at the very difficult time, we run the risk of losing a huge amount of our businesses who cannot afford and often do not qualify for further debt in addition to their losses due to the COVID-19 shutdown. Landlords and tenants are all businesses that UK Plc relies upon. This is now urgent”.



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