UK businesses with unresolved COVID-19 business interruption (BI) insurance disputes are being urged to review their positions as key limitation dates approach, with lawyers warning that some policyholders could soon be out of time to sue.
COVID-19 was declared a notifiable disease in the UK in March 2020. For many BI disputes linked to that period, a six-year limitation period will begin to expire from March 2026 onwards, depending on the wording and when the cause of action is deemed to have arisen. Where proceedings have not been issued, claims risk becoming time-barred.
The warning comes more than four years after the UK Supreme Court’s landmark FCA v Arch & Others test case in 2021, which clarified how many non-damage BI wordings responded to pandemic-related losses.
Cathy Harris, partner and litigation specialist at Clarke Willmott LLP, said she continues to act for businesses pursuing BI insurance claims arising from the pandemic and is currently representing two with live disputes.
“Unfortunately, many businesses suffered substantial losses during the pandemic but found that their insurance policies did not provide the cover they expected,” she said. “Others may still be pursuing claims without realising that limitation is now fast approaching.”
Harris noted that some firms have kept disputes alive through correspondence with insurers but have not taken formal steps to protect time limits.
Under English law, most contractual claims are subject to a six-year limitation period running from the date of breach or from when the cause of action accrues. In practice, lawyers said the relevant date can be fact-sensitive and limitation can be extended or suspended by a properly drafted standstill agreement or similar arrangement between the parties.
Harris urged businesses with any unresolved COVID-19 insurance issues to take stock now. “If claims remain unresolved, or if businesses are pursuing matters without legal representation or solely through brokers, urgent steps should be taken now,” she said. “Failure to act could result in claims becoming time-barred, removing any opportunity for recovery.”
For the UK market, the looming limitation deadlines mark what many see as the closing chapter of first-wave COVID BI litigation that began in 2020. Since the Supreme Court ruling, insurers have overhauled many BI wordings in an effort to avoid a repeat of pandemic-driven ambiguity.
At the same time, claims and legal teams have been updating playbooks for future systemic events, including large-scale cyber outages and infrastructure failures, where similar patterns of widespread interruption and disputed non-damage extensions could arise.
Clarke Willmott, which has offices in Birmingham, Bristol, Cardiff, London, Manchester, Southampton and Taunton, is advising businesses to obtain specialist legal input to confirm when their specific limitation periods expire, whether any standstill or acknowledgement is in place, and what action, if any, is still open to them.
For insurers and intermediaries, the message is similar: ensure records, advice and limitation strategies on long-running COVID-19 BI files are documented and revisited now, before the law, rather than negotiation, brings those disputes to an end.
