Pub and restaurant operators demand payout from insurers in legal battle

Since the Covid-19 outbreak closed all hospitality businesses in the UK, a story that has kept emerging is the failure of insurance companies to payout on policies.

In spite of the fact that some polices do cover business interruption for infectious diseases, the insurance companies have sough to rely on a ‘technicality’ to avoid paying out.

In a number of cases insurance companies are rejecting claims on the basis that the disease did not break out on the premises itself. They argue that a government enforced shutdown is not an insured risk.

Some operators are refusing to accept this. Chris Morgan, owner of the Admiral Benbow in Penzance, is quoted in the Independent as saying “If I’d had a case of Ebola in my pub, God forbid, I would have been covered. If I closed down because the whole of Cornwall outside my pub caught Ebola, I’d get nothing. It’s ridiculous.”

Like many publicans, Chris pays thousands each year for cover on the assumption that it will payout in the event that something like the Covid outbreak occurs.

Top London based law firm Mishcon De Reya has now stepped in to offer a lifeline, undertaking to review hospitality businesses’ insurance policies for free, and to take action if there is a reasonable case.

Given the precarious position many hospitality businesses find themselves in, they would not be in a position individually to fight against a large insurer. It is hoped that by adopting a group approach, there is sufficient strength in numbers.

Sonia Campbell, head of the insurance disputes practice at Mishcon de Reya, is quoted in the Independent as saying “In times of crisis they expect their insurance to respond. Yet I am hearing time and time again that insurers are either stone-walling, unfairly limiting or simply point-blank refusing to pay out under business interruption policies.”

The Publican’s Post is fully behind this action, and we wish the group every success. We will be following the story with keen interest.