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Thirty travel agents have come together in a proposed class action lawsuit demanding insurance providers pay out for business interruption caused by the COVID-19 pandemic.
Bailey’s Travel owner Chris Bailey put out a call to fellow agents who have had business interruption insurance claims rejected, reports Travel Weekly.
“I’m quite pleased with the response we’ve had so far but I’m sure there are others who may be entitled to payouts,” he said. Bailey, who is seeking £200,000 and £250,000 in lost earnings on his business interruption insurance, said he hoped around 50 agents would joined the case.
“The more people I can get involved in this, the better chance we have of making it work. It’s a numbers game; we have strength in numbers.”
Bailey’s proposed class action comes after the Supreme Court ruled in January that insurance providers must pay out business interruption insurance for businesses affected by COVID-19.
The judgement means small businesses in Britain may be entitled to about £1.2 billion in compensation from insurers for COVID-19 losses. Business Secretary Kwasi Kwarteng said on Twitter that it was a “very welcome decision by the Supreme Court.”
“This will be a lifeline for tens of thousands of hairdressers, bars, restaurants, and other small businesses that did the right thing and closed their doors to protect the health of the nation.”
Bailey told Travel Weekly that his claim with Axa had been repeatedly rejected based on specific wording, which says that a “notifiable disease manifesting itself at the premises’. He said that Axa told him the wording meant that someone on-site must have contracted COVID-19 in order for him to be eligible. However, Bailey is challenging the definition of the wording, saying that COVID-19 did exist at the premises.
Bailey is currently seeking legal representation for the case and told Travel Weekly that the next step was checking how each agency’s policy could work together in the claim, and then putting them together in one case.
“The policy I have is very standard and widespread across the independent agency sector, so I’m sure hundreds of agents out there who have similar claims,” he told Travel Weekly. “Alone we will struggle to fight a large insurance company in court but together we have a much better chance.”
Other trades in the travel industry are also facing coronavirus interruptions, with British Airways deferring £450 million in pension payments under an agreement with the New Airways Pension Scheme. In February, the airline said that it planned to repay the funds meant for pension payments with interest. The move will help the airline retain hundreds of millions in cash, says the Guardian.
Businesses in Ireland are also facing similar issues over business interruption insurance. Hundreds of pub owners have joined a fight against insurance companies who aren’t paying out COVID-19 related claims, with more than 600 restaurants pressuring insurer FBD to honour its policies, threatening lawsuits if they don’t pay out, according to Breaking News Ireland.
In February, a senior government minister in Ireland reportedly warned that a watchdog agency may have to get involved if insurers fail to pay business interruption claims.
Do you own a small business that was forced to close due to coronavirus lockdowns? Did you make a claim under your business interruption insurance policy? Tell us what happened in the comment section below.
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