Stratford insurance firm NFU Mutual faces multi-million pound Covid legal challenge
FARMERS and rural businesses left out of pocket when their insurance policies didn’t pay out during Covid have launched a multi-million pound legal claim.
Tiddington-based NFU Mutual was last week served with court papers by a number of policyholder members, claiming they are owed millions in total for business losses suffered between 2020 and 2022.
The group action includes 37 initial claimants, mostly farm businesses with other related activities such as wedding venues and caravan and camping sites.
Claimants say they bought insurance policies with NFU Mutual to cover them against business interruption. They argue the rural insurer was liable to provide an indemnity to each of them, plus damages for breach of contract, breach of implied terms, interest and costs.
One of the claimants in the action is Tim Ashton, whose family owns Soulton Hall in Shrewsbury. He said his farming, tourism and wedding venue was forced to shut for two-and-a-half years during the pandemic to comply with lockdown restrictions.
Mr Ashton, who’s appeared on BBC’s Countryfile and Radio 4, said: “We bought expensive insurance for our business being stopped, in common with tens of thousands of others NFU Mutual were supposed to be looking after, but we have all been let down.”
Law firm Penningtons Manches Cooper sent a ‘letter before action’ to NFU Mutual on behalf of the initial claimants in January 2022.
This followed a Supreme Court ruling in January 2021 in a Financial Conduct Authority (FCA) business interruption test case, which found in favour of insurance policyholders. That case did not involve NFU Mutual but lawyers say there are similarities.
However, on its website NFU Mutual, which employs about 1,000 people around Stratford and Tiddington, states the opposite: “We have reviewed both the High Court and subsequent Supreme Court rulings to see if issues decided in respect to any similar NFU Mutual policy wordings will affect any of our customers’ claims. We can confirm that our position is unchanged following the appeal in the Supreme Court – our three core non-damage business interruption polices do not respond to Covid-19 related losses.”
It is thought that as many as 9,000 policies may have been sold by NFU Mutual in England, although this number has not been confirmed by the insurer.
Colin Hayes, senior associate at Penningtons Manches Cooper, told the Herald: “The claimants we act for in this group action purchased policies from NFU Mutual in good faith, believing that their policies would provide them with cover against any interruption or interference to their business as result of the government’s responses to an incident.
“However, despite the national lockdowns and various other restrictions, these policyholders have still not been paid. Whilst a lot of businesses have recovered over time, many businesses are still struggling because of this, and some businesses have sadly had to close altogether.”
He added: “This group action, which we are running on a ‘no-win no-fee’ basis, provides a means for any affected policyholders to try to reclaim the money they believe they may have been rightfully entitled to be paid. We would ask that anyone who thinks their business may been affected to contact us as soon as possible.”
A spokesperson for NFU Mutual said the firm was unable to comment as legal proceedings are ongoing.
