Legal fight continues as Tiddington-based NFU Mutual refuses to pay out 37 claims to farmers and rural businesses for Covid losses

TIDDINGTON-based NFU Mutual has maintained it does not owe a group of farmers and rural businesses millions for Covid losses.

The insurer laid out its position in a formal legal defence served last month.

As reported by the Herald in July last year, NFU Mutual was served with court papers by policyholder members, claiming they are owed millions of pounds in total for business losses suffered between 2020 and 2022.

The group action includes 37 initial claimants, mostly farm businesses who also run wedding venues and caravan and camping sites.

Claimants say they bought insurance policies with NFU Mutual to cover them against business interruption.

The proceedings against NFU Mutual were put on hold, pending a decision from the Court of Appeal in another case by another policyholder, against another insurer

Colin Hayes, senior associate at Penningtons Manches Cooper, who represents the largest group action, told the Herald: “Sadly, it did not resolve matters in our case.

“Whilst the Court of Appeal appeared to us to agree with the core basis of our clients’ claims against NFU Mutual, that an ‘occurrence’ of Covid-19 can be an insured ‘incident’, the Court of Appeal did not make a binding decision on that point.

“Because this decision did not therefore conclude our clients’ claims against NFU Mutual, the group action proceedings then started to move forward again procedurally.”

Mr Hayes added: “In the last few weeks, NFU Mutual have filed their formal defence to the group action claim, formally denying liability to indemnify any of their customers under the policies upon which the group action claim is brought.

“The contents of the defence simply reflect NFU Mutual’s earlier position.

“This is despite customers purchasing policies from NFU Mutual in good faith, believing their policies would provide them with cover against any interruption or interference to their business as result of the government’s responses to any ‘incident’.

“We have filed and served a formal reply to NFU Mutual’s defence, formally making this point on behalf of the claimants.”

The next stage is a case management conference, and unless NFU Mutual changes its stance, a hearing is expected later this year.

More businesses have applied to join the 37 who make up the group action, Mr Hayes said.

It is thought that as many as 9,000 of these policies may have been sold by NFU Mutual in England, although this number has not been confirmed by the insurer.

The group action is being run on a ‘no win no fee’ basis.

The NFU said as these are ongoing legal proceedings, it would not be appropriate to comment and pointed the Herald to the company’s defence documents.

Part of that defence revolves around the argument of whether Covid is considered an ‘incident’ under the terms of the insurance. NFU Mutual’s case is that it does not and is not therefore covered by its policies.

It also says the case involves policies held by only a small number of customers.