The decision by the High Court to uphold the claims by Pub owners under the business interruption aspects of their Public House insurance policies with FBD Insurance is sure to see wide-spread ramifications across the industry and may cause a sea-change in how insurers treat such claims going forward.

The owners of Sinnotts, Lemon and Duke, The Leopardstown Inn and Sean's Bar had claimed losses due to business interruption under their insurance policies. Business interruption insurance is intended to cover the loss of income a business suffers after some kind of catastrophe and is designed to put the business back in the same position it would have been in had the event not occurred. Insurance policies generally list a number of scenarios that are covered under the policy. It appears FBD's insurance policy covered closure of the business due to an outbreak of disease in or within a 25 mile radius of the workplace. The High Court rejected FBD's claim that because COVID-19 was a nationwide situation it did not meet this criterion and confirmed that once there was an outbreak within the 25 mile radius and the outbreak was one of the causes of the closure it was satisfied that this condition of the policy was met.

The case is before the High Court again on 17 February for a decision on quantum, which will dictate how significant the judgment may be. The decision is potentially more far-reaching than purely the Pub trade and is likely to be scrutinised closely by others in the hospitality industry and insurers.

Originally Published by BHSM, February 2021

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