UK insurance ruling could support pubs’ Covid claims

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Irish businesses fighting to make insurers cough up for business interruption claims made because of the Covid pandemic will be hoping that a UK ruling yesterday will strengthen their court cases here.

The UK’s High Court issued a ruling in a test case taken by the Financial Conduct Authority that should immediately benefit hundreds of thousands of business policyholders there.

The FCA had argued in court that the ‘disease’ and, or ‘denial of access’ clauses in a representative sample of policy wordings provide cover in the circumstances of the pandemic and that the trigger for cover caused policy-holders’ losses.

The court ruled that most, but not all, of the disease clauses in the sample provide insurance cover.

However, the judgment did not say that the eight defendant insurers – including Zurich and Royal & Sun Alliance – are liable across all of the different types of policy wording in the sample considered by the court.

The judgement in the test case, which could be appealed, was not intended to encompass all possible disputes, but to resolve key contractual uncertainties and ‘causation’ issues to provide clarity for policy-holders and insurers.

In Ireland, four test cases involving four pubs that have been refused payouts by insurer FBD for business interruption claims are due to commence in the High Court on October 6. The outcome will be closely watched by more than 1,000 pub owners.

Separately, about 27 restaurants here have started legal action in the High Court against their insurers, having made claims for business interruption due to the pandemic.

They’re being represented by solicitor Georgina Robinson of Robinson Solicitors in Dublin.

“We have no similar kind of findings here in relation to a global pandemic,” she said in relation to the UK ruling. “This is the first kind of precedent and I think it will be very persuasive. You’ll see the courts will reference it.”

She said she will be “absolutely” relying on the UK ruling as she represents the restaurants in her action.

However, she said that ultimately the wording of specific policies will be the important deciding factor.

“Until we have the FBD case over and there’s a judgement of the Irish courts, I don’t think the insurers are going to soften their attitude in any of the claims,” said Ms Robinson.

She said the case taken by pubs against FBD will be important and that the restaurants’ case might not even have to proceed depending on the outcome of that action by the pubs.

“We brought what we think are the strongest cases,” noted Ms Robinson, adding that in all those cases the underwriter is a firm called Specialist Underwriting Services.

The action is being backed by the Restaurants Association of Ireland.

“We feel the way those policies are worded that they don’t exclude an infectious disease by way of a pandemic,” said Ms Robinson.

“Some of the policies mention SARS, and Covid is a derivative of SARS,” she pointed out. Both diseases are part of the coronavirus family.

The hearing between the pubs and FBD is expected to last up to two weeks.

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