The Covid-19 pandemic created unprecedented disruption for businesses across the UK. During national lockdowns, many businesses were forced to close entirely, reduce trading hours, limit customer access, or adapt operations overnight.
At the time, many business owners believed their business interruption insurance would protect them against losses caused by lockdown restrictions. However, thousands of claims were rejected by insurers, often on the basis that pandemic-related disruption was not covered by their policies.
Following a series of important legal decisions, including landmark Supreme Court rulings, the law has become much clearer. Many businesses that were previously told they could not claim may now be entitled to compensation for losses suffered during lockdown periods.
Here we explain what a business interruption claim is, who may be eligible, and the important deadlines businesses need to know when seeking redress for losses caused by Covid-19 restrictions and closures.
What is a business interruption claim?
A business interruption claim is a legal or insurance claim made by a business seeking compensation for financial losses caused by an unexpected interruption to normal trading.
During the Covid-19 lockdowns, many businesses experienced serious disruption due to:
- Mandatory business closures
- Restrictions on customer access
- Reduced trading capacity
- Cancelled bookings and events
- Supply chain disruption
- Government stay-at-home orders
Many business interruption insurance policies included wording relating to infectious diseases, prevention of access, or government-enforced closures. However, insurers frequently rejected claims or interpreted policy wording very narrowly.
Recent court rulings clarified that some insurers may have wrongly denied valid claims linked to lockdown restrictions and Covid related closures.
As a result, many businesses may now be entitled to recover losses suffered during local or national lockdown periods.
Business interruption insurance may cover losses such as:
- Loss of revenue during forced closure periods
- Reduced income caused by lockdown restrictions
- Ongoing fixed costs such as rent and wages
- Cancellation of bookings, events, or contracts
- Losses caused by reduced footfall or restricted customer access
The amount businesses may recover depends on the wording of their insurance policy and the financial impact suffered during the lockdowns.
Who is eligible?
You may be eligible to bring a business interruption claim if most of the following apply to your business:
- You held business interruption insurance during the Covid-19 pandemic
- Your business suffered financial losses during lockdowns or government restrictions
- Your insurer rejected your claim or paid less than expected
- Your policy included wording relating to infectious diseases, prevention of access, or public authority closures
- Your business experienced closures, restricted trading, or reduced income during lockdown periods
Claims may be particularly relevant for sectors heavily affected by lockdown measures, including:
- Hospitality businesses, including pubs, restaurants, hotels, and cafés
- Retail businesses and shopping venues
- Gyms, salons, and personal care businesses
- Leisure and entertainment venues
- Travel and tourism businesses
- Event companies and wedding venues
- Care homes and healthcare providers
For many businesses, losses during lockdown periods ran into tens or even hundreds of thousands of pounds.
Important deadlines and lockdown eligibility
Please note that the deadline for bringing new Covid-19 business interruption claims relating solely to Lockdown 1 has now passed.
In relation to Lockdown 2 (5 November 2020 to 2 December 2020), claims can only be considered where businesses were also affected during Lockdown 3 (6 January 2021 to 12 April 2021), as it is not commercially viable to pursue Lockdown 2 claims alone.
The current deadlines for bringing new claims are:
- Businesses affected during both Lockdown 2 and Lockdown 3 must bring a new claim by 23 October 2026
- Businesses affected during Lockdown 3 alone must bring a new claim by 27 November 2026
If your business experienced disruption during these periods, it may still be possible to seek compensation, but time limits apply.
How to make a claim
Making a business interruption claim usually starts with reviewing your insurance policy and assessing how your business was affected during the lockdowns.
Strong claims often involve businesses that:
- Held business interruption insurance during Covid-19
- Were forced to close or restrict operations during lockdowns
- Had claims rejected or only partially paid
- Suffered significant financial losses during restriction periods
- Have retained copies of policies, insurer correspondence, and financial records
A legal review can assess whether your insurer handled your claim fairly and whether recent legal rulings mean your business may now be entitled to compensation.
Even if you were previously told your claim was unsuccessful, changes in the law may mean you are now eligible to recover losses caused by Covid-19 lockdown restrictions.
Any information provided in this article is for general information purposes only and should not be relied upon as legal or financial advice. Please note that limitation periods apply to business interruption claims and eligibility will depend on the specific circumstances of your business and the wording of your insurance policy.
If you have any thoughts on this topic, or any other consumer issues you would like us to cover, feel free to get in touch with us at support@resolver.co.uk