The Financial Conduct Authority (FCA) has rejected calls from the hospitality sector to extend the deadline for pandemic-related business interruption claims. The regulator confirmed it would maintain its current position on claims timelines despite industry requests for a two-year extension.
Trade groups representing restaurants, pubs and entertainment venues, alongside Stewarts Law LLP, submitted a request in December 2025 urging the FCA to grant additional time. Most business interruption claims face a six-year limitation period in England and Wales, with the majority set to lapse in March.
The open letter was signed by trade bodies representing more than 155,000 businesses. The group warned that without FCA intervention, unresolved COVID-19 business interruption disputes could trigger increased litigation as policyholders seek to preserve their position before claims become time-barred, adding pressure to court resources.
According to Stewarts, fewer than 50,000 COVID-19-related business interruption claims have been accepted by insurers. The law firm estimates that approximately 370,000 policies could qualify for compensation.
The Supreme Court is expected to rule in February on whether insurers can deduct furlough payments received by policyholders from their claims. Stewarts has called on insurers to honour the court's decision regardless of whether claims would otherwise be time-barred.
In its response, the FCA stated that firms are expected to assess how new court rulings may affect policy interpretation and claims handling. The regulator declined to reinstate its "stop the clock" guidance, instead directing companies to evaluate whether recent rulings could impact existing and future claims.
"In practice this means that where claims have already been made in line with the time limits required by the policy but have been inappropriately rejected or underpaid in light of the new ruling those will need to be looked at to see if remedial action is appropriate in line with the expectations set out above," the FCA wrote.
For claims yet to be filed, the regulator indicated it sees no reason why firms cannot consider relevant time-limit conditions within policies. It added that each claim should be assessed on its individual merits.
The FCA acknowledged it lacks authority to control insurers' litigation strategies or compel them to waive limitation defences. Should the Supreme Court reverse course on furlough payment deductions, the regulator said it would expect claims and reassessments to comply with its regulatory framework.
Policyholders would need to be given an opportunity to seek reconsideration and access to complaints procedures if they dispute outcomes.
