HOSPITALITY businesses are demanding action after insurers failed to pay out when their premises closed because of the coronavirus.

Some say their claims have been rejected even though they took out insurance against pandemics.

A national campaigning body, Hospitality Insurance Group Action, is representing businesses who say their insurance companies are stonewalling or turning down claims.

The law firm Mishcon de Reya is advising the group on a collective action which campaigners say could run into tens of millions of pounds.

Trevor Ayling, owner of Renoufs Cheese and Wine Bars in Dorset and the New Forest, said: “Like most people, we’ve been hit hard by the realities of the Covid-19 lock-down. On March 20, this year, we were told by the government to close our doors indefinitely, with immediate effect, on an otherwise fully-booked evening.

"In light of these difficult circumstances, we have decided to claim on our insurance policy and have tried every which way to get our insurer to respond – to no avail. This is simply unacceptable.

"What is the point of business interruption insurance, when your insurer refuses to respond or even acknowledge any claim?

“We’re a family-run, local independent group of award-winning restaurants and feel a huge sense of duty to our community and loyal customers; we want to be able to reopen for them as much as for our staff and family, as soon as restrictions ease. A payout on our policy would go some way to making that a reality and to secure the future of Renoufs.”

The campaign has received backing from Wonky Table, the group that has sprung up since the lockdown to represent hospitality in the Bournemouth, Poole, Christchurch and Wimborne areas.

Andy Lennox, who owns the Ashley Cross restaurant Zim Braai and previously co-founded Koh Thai, said: “I’ve got human disease cover, pandemic cover and government closure cover with a good insurer. However, they are saying: ‘We list the diseases you’re covered for and thus because Covid-19 was not a known disease at the time, you’re not covered’.

“If someone walked into the restaurant with Ebola, I’m covered.”

He said he understood that not all claims would be paid “because they would go bust if they paid every single business interruption claim”.

But he wanted insurers to make some payments towards their customers' losses and said it might require new legislation to make them.

“The government have said they should be paying out. Every single insurance company has been told they should be paying out but they’re saying no, the government is wrong," he added.

The Association of British Insurers has said: “No country in the world is able to provide widespread pandemic insurance, and the UK is no exception. For this type of cover to be available and affordable, would require a very significant subsidy from the government.”

It said its members were expecting to pay more than £1.2billion in claims related to the pandemic.

It said policies covering infectious diseases normally only applied when the disease was present on the premises, which then needed to be closed and cleaned.