The hospitality industry has welcomed a Supreme Court ruling that insurers will have to payout on business interruption claims.

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A member survey by the British Beer & Pub Association (BBPA) last May found that 56% of sector businesses had applications for business interruption cover rejected. Separate research from the British Institute of Innkeepers in the same period found that just 3% of pub businesses had been successful in receiving a business interruption insurance claim.

BBPA chief executive, Emma McClarkin, said: “The lack of payouts over insurance claims has added to the terrible woes and uncertainty our sector has faced over the last ten months. It is why the BBPA backed the [Financial Conduct Authority] in its campaign to resolve the issue.

“While our sector is far from out the woods yet, this announcement helps resolve some of the uncertainty it has faced on insurance cover and is warmly welcome.”

UKHospitality chief executive, Kate Nicholls, said: “Businesses took out policies in good faith and it is right that insurers stick to these agreements and honour claims.

“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. It could be the difference between keeping staff members on or being forced to let them go; it could mean the survival of a business that was previously staring collapse in the face.”

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