Salon Gold COVID insurance claims return to the spotlight as compensation campaign targets beauty businesses

A legal campaign is encouraging salon owners to revisit pandemic insurance losses, with policy wording, legal deadlines and the cost of representation central to any potential recovery.

More than six years after COVID-19 forced salons to close, a compensation campaign is encouraging beauty businesses to revisit unpaid business interruption claims, bringing Salon Gold’s pandemic insurance dispute back into focus. KP Law, working with RLK Solicitors, is inviting enquiries from businesses that held policies through Salon Gold, Morgan Richardson or Beazley, including those whose claims were rejected and those that never submitted a claim.

With many claims arising from the first lockdown having reached their usual six-year limitation deadline in March 2026, the renewed attention comes at a difficult point in the legal timetable. Businesses considering an approach now need to establish whether their right to pursue a claim has been preserved.

The wider dispute began with a fundamental disagreement over what business interruption insurance covered when the pandemic closed commercial premises. The Financial Conduct Authority brought a test case to clarify the meaning of selected policy wordings, and the Supreme Court’s judgment on 15 January 2021 substantially supported the regulator’s appeal on behalf of policyholders. It clarified cover for many businesses, while leaving individual claims and payments dependent on the relevant contract and circumstances.

For the hair and beauty sector, a particularly significant development followed on 31 January 2024, when arbitrator Sir Richard Aikens issued an award concerning Salon Gold policies. The proceedings involved personal care businesses insured under the Henry Seymour Salon Gold Wording 2019, or similar terms, with Canopius Managing Agents Limited acting as managing agent for Lloyd’s Syndicate 4444.

The dispute centred on a public emergency extension covering certain losses arising from government or local authority action or advice. A central issue was whether the emergency itself had to occur near the insured premises. Aikens concluded that it could exist outside the immediate area, provided it posed the required danger to life or property nearby. He also found that an emergency threatening life in the vicinity of all UK premises existed by no later than 12 March 2020. These findings supported policyholders’ arguments about the reach of the cover. The collective proceedings concerned more than 300 claims worth over £7.5 million. Thirteen test cases were selected from businesses in different locations. The £7.5 million figure was the reported value of the claims involved; individual losses still needed to go through assessment before compensation could be recovered.

For businesses considering a claim today, however, the passage of time has become a separate obstacle. Under English law, most insurance claims are subject to a six-year limitation period running from the relevant loss. Stewarts warned in March 2026 that businesses needed to protect their position through legal proceedings or a binding standstill agreement, which pauses the deadline. Whether those steps were taken, and which losses and legal rules apply, now requires individual assessment. Completing an eligibility form should not be assumed to preserve a right to sue.

The FCA addressed the deadline issue in a letter dated 23 January 2026, declining to make the further intervention requested by business representatives. It said it did not have powers expressly envisaging a requirement that insurers give up a lawfully available limitation defence. At the same time, it reiterated that insurers should consider the implications of new court rulings for earlier claims, including whether remedial action was appropriate where claims had been wrongly rejected or underpaid. Those expectations do not establish a general extension of litigation deadlines.

KP Law’s campaign advertises a no-win, no-fee arrangement with no upfront payment, with its published terms stating that a successful claim attracts a fee of 40% of the amount recovered, plus VAT and expenses. Applying the standard 20% VAT rate makes the fee including VAT equivalent to 48% of the recovery before expenses. A business considering the arrangement should obtain a clear explanation of the deductions and contractual terms before signing.

For salon owners reviewing their position, the starting point is the insurance actually held during the affected period. The policy schedule, full wording, previous claim correspondence and evidence of losses will help establish what was covered and what happened to any earlier claim. The Financial Ombudsman Service emphasises that business interruption policies differ significantly, with some responding to pandemic losses and others providing no cover in the circumstances concerned.

Eligible small businesses may also be able to pursue a complaint through the Financial Ombudsman Service without paying a representative. The service has its own eligibility requirements and time limits, including a usual six-month deadline after a valid final response from the financial business. Any assessment of the available routes should therefore address both the merits of the insurance claim and whether the relevant deadline remains open.

For a salon still carrying pandemic losses, renewed publicity is most useful when it leads to a clear assessment of what the policy covered, whether recovery remains possible and how much of any settlement the business would retain.