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high court More than 400 restaurants seek compensation from insurers for Covid-19 closures


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More than 400 restaurants could be represented at the High Court within days as they seek compensation from 12 insurance companies as a result of Covid-19.

A solicitor acting for the restaurants has written to the insurance companies in the wake of the landmark FBD case last Friday.

The High Court had ruled four pub owners were entitled to compensation by insurer FBD for the disruption to their businesses during the pandemic.

FBD has disputed the claims and argued the closures did not take place as a result of an outbreak of disease at the premises or areas where the pubs are located.

Adrian Cummins, CEO of the Restaurants Association of Ireland (RAI), said legal advisors had reviewed hundreds of policies on behalf of its members.

Solicitors had now written to 12 insurance firms seeking “immediate” interim business interruption payments and confirmation of indemnity.

“We had to wait before issuing (the letter) to 12 insurance companies on behalf of 423 businesses,” Mr Cummins said.

“Since Friday we have received more and more policies coming into the association.

“Any policy we have received, we have sent to our legal team to analyse.

“The letters issued to the 12 insurance companies state that if they don’t respond within seven days of last Friday’s date, with confirmation of indemnity and interim payments, we’ll go to the High Court.

“We want the insurance companies to do the right thing in light of the FBD case.”

Mr Cummins said from April and May, last year, a number of insurance companies said restaurants were not entitled to compensation during the pandemic.

“But the game has changed totally due to the FBD case - it’s set a precedent,” he added.

“We believe if you have contained in an insurance policy, business interruption for a business being closed down, it’s possible to seek recourse.”

Mr Cummins said compensation was “hugely important” practically and ethically.

“First of all it’s the principle,” he said. “If you pay X to receive Y, it is fitting that’s what takes place.

“The insurance companies, however, decided the policy holders paid X and got zero.

“All the insurance companies have a major credibility problem. Businesses entered into a contract and paid policies for years and years and then Covid arrived and the insurance companies stuck their heads in the sand and tried to deny their responsibilities.

“That’s wrong and it has to be corrected. They need to pay up and quickly.”

Last Friday Mr Justice Denis McDonald found a policy sold by FBD covered losses four pubs endured when they were forced to close due to Covid-19.

The judge did not agree with FBD’s interpretation of its policy. He stated cover is not lost where the closure results from a nationwide outbreak of the disease, provided there is an outbreak within the 25-mile radius and that outbreak is one of the causes of the closure.

He added that the losses would be dealt with at a later date. The four publicans took the case after FBD Insurance Plc refused to indemnify them.

They also went to court due to the insurance company’s stance that its policies of insurance did not cover the disruption caused to businesses by Covid-19.

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