Insurers Aviva and QBE face possible legal action from the Hospitality Insurance Group Action (HIGA) over disputed Covid-19 claims.
HIGA is a collection of business owners who believe they are owed a payout on insurance policies after the government forced them to shut during the lock down.
Most insurers say there are no grounds to pay out claims based on the policies.
Lawyers for HIGA at Mishcon de Reya have conducted a review of 500 business interruption policies to determine if there are grounds to bring a claim.
Following the view they have narrowed it down to Aviva and QBE and believe there are grounds to bring legal action to challenge the firms at the High Court.
HIGA's lawyers are speaking to litigation funders about funding the possible action.
Mishcon de Reya partner Sonia Campbell said: "We were overwhelmed by the expressions of interest in bringing actions against insurers from within the hospitality industry – demonstrating how hard-hit this sector has been as a result of the government-enforced lock-down and how intransigent many in the insurance industry have been towards their policyholders."
Aviva said its standard terms and conditions do not cover pandemics. QBE declined to comment.
