NFU Mutual served with Covid group action

NFU Mutual could be facing a bill stretching to millions of pounds for business interruption claims related to the Covid-19 lockdown that they refused to pay.

On Tuesday (25 June), the rural insurer was served with court papers by a number of their policyholder members, claiming they are together owed millions of pounds.

The group action includes 37 initial claimants, most of whom consist of farm businesses with hospitality diversifications, such as wedding venues and campsites.

The total value of the group’s claims runs into millions of pounds.

See also: Law firm launches Covid-19 group action against NFU Mutual

The claimants say they took out insurance policies with the rural insurer to cover them for business interruption during the pandemic.

They argue that NFU Mutual was liable to provide an indemnity to each of them as well as damages for breach of contract, breach of implied terms, interests and costs.

Colin Hayes, a senior associate from law firm Penningtons Manches Cooper, who is representing the group action, says it is still possible for the many thousands of other policyholders who are not in the initial set to join this action, with no up-front costs.

Mr Hayes said: “Our clients, along with many other policyholders, incepted a policy with NFU Mutual in good faith, which covered them against incidents where access to their premises was restricted by a public authority. 

“This group action provides a means for NFU Mutual policyholders to reclaim the money they believe they are rightfully entitled to have been paid.”

The group claim has been formally filed with the High Court in London and served to NFU Mutual, whose defence is due by 22 July 2024.

Thereafter, the court will give directions regarding the exchange of evidence and when a trial will take place.

Farmer claimants

Shropshire farmer Tim Ashton’s family are within the set of initial claimants.

Mr Ashton said: “The Covid-19 pandemic broke out and we found we could not trade because it was illegal to run the hospitality side of our business.

“Prior to Covid, the family had prudently bought expensive insurance policies with NFU Mutual to cover this risk, which senior leadership at the insurer are continuing to seek to escape despite repeated judgments in the court making that increasingly untenable.”

Philip Paxman, director of South Farm, based near Cambridge, is another claimant in the group action.

His farm hosts more than 200 weddings a year in restored farm buildings, with over 25,000 wedding guests each year fed principally on organic produce grown and reared on the farm.

During Covid, the government closed down all wedding venues to reduce the risk of spreading the disease.

Mr Paxman said: “We were closed down by order of government following widespread incidents of Covid, including in our parish. In our opinion, that triggered our business interruption cover with NFU Mutual.”

A spokesperson for NFU Mutual said it was not able to comment on ongoing legal proceedings.