• Most Covid business interruption (BI) claims are due to lapse in March 2026, leaving thousands of businesses unable to recover losses more than five years since the pandemic.
• The sector is already under severe financial pressure, and unresolved claims further threaten the viability of thousands of operators.
• Disputes firm Stewarts and major hospitality associations are urging the FCA to require insurers to extend the BI claims deadline to 2028.
• The Supreme Court will decide in February 2026 whether insurers are entitled to take the benefit of policyholders’ furlough payments, or whether further payments must be made.

Stewarts, together with the UK’s leading hospitality associations representing more than 155,000 businesses, have signed an open letter to the Financial Conduct Authority (FCA), urging the regulator to intervene as Covid Business Interruption (BI) claims approach expiry.

Stewarts, which has represented the successful policyholders in a series of test case litigation, estimates that fewer than 50,000 claims have been accepted by insurers out of an estimated 370,000 policies that could qualify for BI compensation. As a result, many thousands of hospitality businesses remain significantly out of pocket more than five years after the pandemic forced venues across the country to close for extended periods.

In the absence of FCA intervention, unresolved Covid BI claims risk triggering significant volumes of litigation from those policyholders able to bear the cost and risk of issuing proceedings. This will place undue strain on public resources at a time when the country’s court system is under more pressure than ever. Secondly, and of more concern, many SME policyholders in the hospitality and entertainment sectors, may be prevented from claiming compensation to which they were legally entitled, simply because they lack the resources to bring their own claims after years of delay in resolving the underlying legal principles.

Aaron le Marquer, 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. It is vital that adequate time is now allowed for the latest court decisions to be implemented. In February 2026, the Supreme Court 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.”

In England and Wales, most insurance claims are subject to a six-year limitation period.  That means that a majority of unsettled Covid-19 BI claims [with values ranging from all the way from tens of thousands to hundreds of millions] will start to become time-barred from March 2026 onwards, unless legal proceedings are issued, or standstill agreements agreed with insurers.

Stewarts, together with UKHospitality are requesting the FCA to issue new guidance to the insurance industry no later than 20 January 2026, to continue to pay valid claims for two further years following the looming March 2026 expiration date. The additional time will allow for much-needed clarity on several issues that continue to be disputed in ongoing Covid 19 BI policyholder cases, including the treatment of furlough payments, a topic that will be decided in the Bath Racecourse Supreme Court hearing in February.

This open letter was published in the following publications:

• https://www.thetimes.com/article/27d1c76c-c5d8-4bee-9932-4b147477b27a?shareToken=0f4f69ca69a1cde2886660b09f409b9e
• https://www.theinsurer.com/ti/news/exclusive-uk-hospitality-associations-urge-fca-to-extend-covid-19-bi-claims-2025-12-18/