Axa to pay ‘bulk’ of French restaurants’ virus claims as FBD faces over 700 cases
INSURER Axa yesterday said it would meet the bulk of business interruption claims from some restaurant owners in France after it lost a court case that was seen as a potential precedent for coronavirus-related disputes across the world.
The move from the insurance giant will be watched closely, in particular by FBD Insurance and businesses in the hospitality sector here.
It comes after a Paris court ruled last week that Axa should pay a restaurant owner two months’ worth of revenue losses caused by the virus pandemic.
Axa had argued its policy did not cover business disruption caused by the health crisis and said it will appeal the Paris ruling. Similarly, FBD says it is “strongly of the view” that its business insurance policies do not provide cover for a pandemic of the nature of the coronavirus.
Litigation between FBD and three pub customers who are claiming cover for business interruption as a consequence of Covid-19 measures has been scheduled for hearing in the Commercial Court in October.
The decision by the court will ultimately come down to how the contracts are worded.
To date, the country’s largest domestic insurer has received more than 700 claims under the business interruption extensions of its business insurance policies, according to an update yesterday.
The company, which has around 1,300 pub customers, said it wanted to have the issues resolved “as quickly as possible”. It believes the quickest and most efficient way of achieving that is for proceedings to be brought by way of test case.
FBD intends using the three cases in October to seek a determination in court over whether losses due to Covid-19-related closure, claimed by pub owners, are covered by their FBD policies under the business interruption clause.
“FBD is confident in our interpretation of policy coverage and are of the view that this approach will provide clarity in an expedient manner to the customers concerned,” the company said.
At the High Court on Monday several test actions by pub owners over whether their insurance policies with FBD cover the disruption in their trade caused by Covid-19 were admitted to the Commercial Court.
The pub owners claim their policies with FBD include a clause that says owners will be indemnified if their premises are closed by order of the local authority or Government if there are “outbreaks of contagious or infectious diseases on the premises or within 25 miles of same”.
Axa had argued its policy did not cover business disruption