Foodservice operators whose financial sustainability has been placed in jeopardy by covid-19 have been thrown a lifeline after the Supreme Court ruled insurers must pay out business interruption insurance claims.
The judgement means thousands of businesses including pubs, restaurants and caterers are in line for pay-outs which could total over £1bn.
Insurers had argued that many business interruption policies did not cover widespread disruption, however judges supported a previous high court ruling from September which largely came down on the side of claimants.
UKHospitality chief executive Kate Nicholls welcomed the judgement, saying: “Should this result in pay-outs to policy holders – a point which is still not clear at present - this could provide an additional lifeline that many businesses desperately need.”
The British Beer & Pub Association (BBPA) also welcomed the news, noting that a member survey back in May 2020 found that 56% of sector businesses had claims for business interruption cover rejected. “It is a glimmer of hope in what is an incredibly tough time for our sector,” said chief executive Emma McClarkin.
Separately, the BBPA has reported that 74% of wet-led pubs are still waiting on Christmas grants to be paid. The prime minister announced the one-off grant, worth £1,000 per pub, to assist wet-led pubs forced to close through Christmas; however as of January 2021, only 1 in 4 pubs (26%) had received the grants, according to a BBPA survey of its members.
The trade association also revealed that over half of the grants introduced to support pubs through the tier restrictions and November lockdown are yet to be paid.
UKHospitality, meanwhile, has written to the chancellor, Rishi Sunak, ahead of the forthcoming budget outlining additional measures needed to accelerate the revival of the hospitality sector. They include an extension to the VAT cut to 5% for a further 12 months and a further business rates holiday for 2021/22.