Disputes firm Stewarts and hospitality trade bodies representing more than 155,000 businesses have signed an open letter to the Financial Conduct Authority (FCA), calling for regulatory intervention as Covid-19 business interruption claims near key limitation deadlines.
The letter argues that unresolved claims could face expiry from March 2026 under the six-year limitation period that typically applies to insurance claims in England and Wales.
Stewarts said it estimates fewer than 50,000 claims have been accepted by insurers out of an estimated 370,000 policies that could qualify for BI compensation. The firm said many hospitality businesses remain out of pocket more than five years after pandemic restrictions led to extended closures.
The letter lands as brokers and claims advisers have also been flagging the March 2026 deadline in the market, warning that the limitation period is set to expire then.
With less than a year remaining in that timeline, the issue has become less about the merits of cover in principle and more about whether unresolved claims can be kept alive without proceedings or standstill agreements.
The group warned that, without FCA action, unresolved Covid BI disputes could trigger a higher volume of litigation as some policyholders seek to preserve their position before claims become time-barred. It said that could add pressure to court resources and leave some SMEs unable to pursue compensation because they cannot fund proceedings after years of delays.
Aaron le Marquer (pictured above), head of policyholder disputes at Stewarts, said: "Five years of test case litigation has established that many policyholders whose claims were initially declined may in fact be entitled to compensation."
He said the firm wants time for recent court decisions to be applied and for remaining disputed issues to be resolved.
For some hospitality groups, the value of preserving a claim before March 2026 can also depend on how policy limits work across multi-entity programmes. A Court of Appeal guidance noted that “any one loss” limits in composite policies should be applied separately to each policyholder rather than collectively, an interpretation that can affect quantum and settlement discussions in group structures.
"In February 2026, the Supreme Cout will decide whether insurers were entitled to take the benefit of furlough payments received by policyholders, and we are asking insurers to commit to following the Supreme Court’s decision regardless of whether claims would otherwise have been time-barred,” Le Marquer said.
He linked the request to the Bath Racecourse Supreme Court hearing expected in February.
Stewarts and the associations asked the FCA to issue new guidance to insurers by 20 January 2026 calling for valid claims to remain payable for two further years beyond the March 2026 deadline. The group said extra time would provide clarity on issues still being argued in Covid-19 BI cases, including the treatment of furlough payments.
