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NFU Mutual COVID-19 Business Interruption Class Action Overview:
- Who: A group of UK farm businesses has retained a law firm to announce its intent to sue rural insurer NFU Mutual.
- Why: The businesses say the insurer illegally denied their claims for business interruptions during the pandemic.
- Where: The farm business group is in the UK.
A group of UK farm businesses have announced its intent to sue the rural insurer NFU Mutual, alleging the company wrongly denied its business interruption claims during the shutdowns of the pandemic.
In a “letter before action” reported on by Farmers Weekly, international law firm Penningtons Manches Cooper claimed NFU Mutual had breached the farm businesses’ contracts by refusing to pay out on business interruption insurance.
“In good faith, we paid our premiums to NFU Mutual for years to protect us against a once-in-100-year event,” a farming claimant told Farmers Weekly. “The worst thing happened. Our business was shut down and we reached for the comfort and the security of the longstanding relationship with NFU Mutual and it turned to total ash.”
According to the law firm, each of the farm business claimants is also in the hospitality industry, one of the industries hardest hit by pandemic shutdowns.
Penningtons Manches Cooper Associate Colin Hayes said the claimants “lost millions” from the repeated lockdowns.
He said the farming businesses’ claims relied on a 2021 Supreme Court decision that widened the scope of some insurance policies to cover closures of the pandemic.
Since then, insurers have paid more than £1.3 billion in compensation, according to the Financial Conduct Authority.
“Our claim relies on the Supreme Court decision, which overruled a High Court judgment on a number of points that the claimants say are relevant to their case and which put in place a much more favourable approach for policyholders, including on points that were not specifically appealed to the Supreme Court,” Hayes said.
NFU Says Supreme Court Decision Not Applicable To Specific Terminology In Contract With Farmers
An NFU Mutual spokesperson confirmed receipt of the letter but said the Supreme Court decision was not applicable to the specific terminology in its contract with the farmers, as the wording was not considered by the court.
“This finding was not appealed to the Supreme Court, unlike other parts of the High Court judgment,” the NFU Mutual spokesperson said. “As a result, the High Court decision confirms that NFU Mutual’s Prevention of Access cover does not respond to COVID-19 related losses.”
Last week, the UK hospitality group that owns the Dirty Martini cocktail bars announced it is starting legal proceedings against insurance companies RSA and QIC Europe Ltd to recover pandemic business losses.
Do you think the insurers should have to pay for business interruptions? Let us know in the comments!
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