Insurers expect to pay out £1.2bn to businesses and individuals hit by the coronavirus crisis, including a record figure for cancellation claims on travel policies, the industry trade body has revealed. The figure, which the Association of British Insurers (ABI) described as a working estimate, includes £900m in business disruption claims, £275m in travel claims and £25m for customers covering weddings, school trips and other events. The initial total compares with more than £400m for the two February storms this year. The ABI said that while most businesses did not have cover against Covid-19, some of those that did were likely to make substantial claims. It added that because such cover was rare, insurers had not built up reserves to pay claims. The spotlight has been on the industry since the crisis began, as businesses have faced problems making claims. While some have discovered they were not covered under the terms of their policy, others claim that insurers are not meeting their promises. On Thursday, 100 pubs and bars said they were taking legal action against the insurer Hiscox over its response to business interruption claims. The ABI’s director general, Huw Evans, said insurers were “painfully aware that the majority of businesses are uninsured for global pandemics”. He said: “Although ABI members expect to pay £900m in business interruption claims, most policyholders are not covered for pandemic losses. “We agree strongly that the UK should examine public-private partnerships to find a lasting solution, to enable more affordable, more extensive pandemic insurance cover to be available to those firms who want it.” The chair of the Treasury select committee of MPs, Mel Stride, urged insurers to be clear and fair in their dealings with customers. He said UKHospitality, a trade body for hotels, pubs and bars, had reported that 71% of its members had had claims rejected. Stride said: “There may be many instances where individuals and businesses believe they are covered, but in reality may not be. However, we are concerned that the insurance sector goes the extra mile in meeting claims wherever possible.” The ABI’s estimate does not include claims made through Lloyd’s and the London Market, so is not an estimate of the total UK cost of the crisis.