On 5th February 2021, the High Court ruled that several publicans were entitled to cover under FBD Insurance business interruption policies, for losses suffered because of the Covid 19 pandemic. This was a similar outcome to a case already decided in the UK Supreme court.
Justice Denis McDonald found that a policy sold by FBD covered losses sustained by the pubs having to close due to Covid 19. This ruling is similar to the recent UK Supreme Court decision of 15 January 2021 where the insurance regulator successfully challenged insurers refusal to indemnify certain businesses under business interruption policies.
FBD argued that their policy did not cover the disruption caused by Covid 19 as it never provided for pandemics, however the High Court disagreed, finding that cover is not lost where the closure of the business affected is prompted by a nationwide outbreak of a disease, provided that the outbreak is within a 25 mile radius and is one of the reasons for the closure of the business.
This is a significant ruling for many businesses with similar business interruption policies. It remains to be seen however whether this ruling will be appealed in the near future. Mr Justice McDonald has delayed a decision quantifying the losses suffered by the publicans until a later date and we will be able to update you once this aspect of the judgement is given.
Following the judgement, Insurance companies indicated that they would work with insured clients. Whilst this case was against FBD, the principles apply to all insurance companies. The full text of the judgement can be found here https://www.courts.ie/acc/alfresco/8bfaa5dd-3ea3-4580-979f-0dfb2d8243be/2021_IEHC_78.pdf/pdf#view=fitH
If you are a publican, restaurant or business owner and feel you might be affected by this judgement, you should first read carefully your insurance policy, liaise with your broker and if you have any questions contact our Head of our litigation Lorcan Dunphy at 062 61288 or email email@example.com