Thousands of hospitality businesses risk losing their right to Covid-related insurance compensation unless the Financial Conduct Authority (FCA) intervenes to extend a fast-approaching claims deadline, industry leaders have warned.
In an open letter to the regulator, disputes firm Stewarts, alongside major hospitality trade bodies representing more than 155,000 businesses, has called on the FCA to require insurers to extend the business interruption (BI) claims deadline by two years. Without intervention, many firms fear they will be locked out of compensation to which they may be legally entitled.
Most Covid BI policies in England and Wales are due to expire in March next year under standard six-year limitation rules. These policies were designed to support businesses forced to close during the pandemic, allowing companies to borrow up to £5 million through participating banks.
However, Stewarts estimates that fewer than 50,000 claims have been accepted by insurers from an estimated 370,000 policies that could potentially qualify. The firm argues that the looming deadline will render the majority of unresolved claims time-barred, leaving thousands of hospitality businesses significantly out of pocket.
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