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Summary
- In a landmark decision by the Ireland High Court, FBD Insurance Group has been ordered to pay four pub owners for the losses incurred due to the disruption caused by Covid-19 pandemic.
- The judgment is expected to benefit more than thousands of pubs and restaurants that have witnessed disruption in the wake of pandemic.
- The latest judgement might impact the estimated net cost of Covid-19 related business interruption claims for FBD.
The Ireland High Court has asked FBD Insurance Group to compensate four pub owners for the losses incurred due to disruption caused by pandemic-induced lockdowns. The lockdowns had forced the pubs to remain shut to curb the spread of the pandemic.
Even if the lockdowns were lifted, pubs would have struggled to get the revenue through the doors as people still fear the awful virus and are hesitant of going to any premises which does not support physical distancing. This has led to despair across the pubs and other leisure spaces.
Also read: British Insurers Extend Support Yet Again for Covid-19 Until March
This is a landmark decision by the apex court, and the result is expected to benefit more than thousands of pubs and restaurants that have witnessed disruption in the wake of the pandemic. It was found that the policy offered by FBD Insurance covered losses incurred due to stores being shut in the wake of a health emergency.
Four bars -- Sinnotts, The Leopardstown Inn, Sean's Bar, and Lemon and Duke -- took action and went to the court. Their lawyers argued that the pubs are entitled to coverage as the policy wordings ensured coverage against the losses.
However, the insurer argued that it provided coverage for the pandemic outbreak at the business premises or within 25 miles of them and not against any national health emergency. Notably, Covid-19 pandemic is a global health emergency. The apex authority did not consider FBD’s interpretation. Additionally, the court sensed the need of quantifying the losses suffered by the ailing sector and said it would deal with it later. The next hearing of the case is on 17 February.
The insurer said that it respects the court’s decision and committed to expediting the claim settlement process for policyholders with valid claims in line with the judgment. Also, the insurer might also arrange interim payments to affected policyholders while final clarity on the quantum is still awaited.
Notably, FBD has sold the policy in question to more than a thousand pubs across Ireland and estimates a pay-out of 30 million euros under the coronavirus interruption loans. The latest judgement might impact the estimated net cost of Covid-19 related business interruption claims for FBD.
