Shropshire businesses join joint claim again insurance company over Covid policies
Shropshire policyholders are among those who have joined a group legal action against an insurance company they say won't pay out for losses arising from the coronavirus pandemic.
Penningtons Manches Cooper (PMC) says for many businesses the coronavirus pandemic and lockdown measures have resulted in a significant loss of income and other damage to businesses - and that in many instances insurers have declined to pay claims under their insurance policy endorsement.
One particular action it is taking on behalf of dozens of affected policyholders relates to NFU Mutual policies principally affecting hospitality businesses such as hotels, wedding venues, pubs, restaurants, and various diversified farm businesses.
One Shropshire man who has joined the group action said the failure to pay out had put a strain on his business at an acutely difficult time.
Colin Hayes for PMC said it had sent a "letter before action" to NFU Mutual on behalf of dozens of affected policyholders whose policies contain the endorsement.
"We expect this represents only a very small number of potentially hundreds of NFUM policyholders possibly affected," he said.
"Specialist lawyers at PMC offer to carry out an entirely free review of the insurance policy documents of any business who believe they may be affected and can advise whether they have a potential business interruption claim suitable for inclusion within the NFUM Group Action.
"If there is a potential claim under the policy, and it is suitable for inclusion, there is a group action that businesses can then join on a ‘no-win, no-fee’ basis, which we can take forward on their behalf."
An NFU Mutual spokesperson said: “We can confirm that we have received correspondence from Penningtons Manches Cooper.
“In the Financial Conduct Authority Test Case, the High Court decided that Prevention of Access wordings similar to NFU Mutual’s do not provide cover for Covid-19 restrictions as they only cover local incidents, of which the typical examples were a bomb scare, a gas leak or a traffic accident. This finding was not appealed to the Supreme Court, unlike other parts of the High Court judgment.
“As a result, the High Court decision confirms that NFU Mutual’s Prevention of Access cover does not respond to Covid-19 related losses.”
One of the Shropshire business owners said: "Many businesses placed their trust in NFU Mutual - and paid hefty premiums - often for many decades to protect their ability to employ people, invest in their communities and continue to play their part should the worst happen."
"Then the worst did happen, and for nearly two years now we were not supported. We were caused huge hardship and strain was placed on business at an acutely difficult time. "
