Insurer DID agree to pay pub chain

Email conf irms market giant would provide coronavirus shutdown cover as court battle to decide liability looms for 1,000 owners

A PUB owner who got a written assurance from his insurance company that it would pay out if he was shut down by coronavirus has been forced to go to court to get the firm to pay up.

In May, Noel Anderson launched legal proceedings against insurer FBD over its refusal to honour the agreement.

Mr Anderson co-owns popular Ballsbridge bar The Bridge 1859 with rugby stars Jamie Heaslip, Rob Kearney, Dave Kearney and Sean O’Brien. He also owns Dublin city centre hotspot Lemon & Duke.

He had been monitoring the emerging coronavirus from the moment it emerged as a threat in China late last year as FBD Insurance was actively chasing his business with approaches of business cover.

In January he sought a guarantee from FBD that it would pay out if he had to close or was otherwise affected should Covid-19 reach our shores.

The MoS has seen an email sent by FBD to Mr Anderson in which the company states that the business interruption part of his policy would include Covid-19, which at that stage was confined only to China.

‘As outlined, our VFI/DPU policy which your policy is written under, is covering the coronavirus and it is the amount specified on the policy, the pub must be forcibly shut down and cannot be voluntary,’ an FBD employee wrote in response to queries from Mr Anderson.

On March 16, Mr Anderson, acting on the directive of the government, closed the doors to his two pubs, which only reopened last week.

Relying on the security of the added guarantee provided by FBD in the January email, Mr Anderson was stunned when the insurer refused to pay out on his policy.

The incoming president of the Licensed Vintners Federation launched legal proceedings in May to compel the insurance giant to pay out on his policy.

The High Court proceedings prompted other bar owners to follow suit and just weeks after Mr Anderson’s initial action, a raft of similar writs was filed against FBD. All were admitted to the fast-track Commercial Court list.

Presiding over the case, Mr Justice David Barniville heard that there could be as many as 1,000 pubs and bars all over the country affected by the dispute.

All of the bars claim their policies of insurance taken out with FBD cover what they claim is an insurable risk.

The affected business cite a clause that states the pub owners will be indemnified if their premises are closed by order of the local or government authority if there are ‘outbreaks of contagious or infectious diseases on the premises or within 25 miles of same’.

Disputing the claims, FBD informed the owners that a pandemic does not fall within the scope of the clause as they consider the closures did not occur as a result of an outbreak of disease at the premises or areas where the pubs are located.

Instead, FBD insists the closures occurred as a result of measures taken at a national level that involved a nationwide closure of businesses.

FBD, which promotes itself under the tag line ‘Supporting People’, has been steadfast in its refusal to pay out.

Traditionally the insurer of the farming industry, it has in recent years sought to expand its scope, by actively pursuing businesses with attractive policy offers.

The company initiated an aggressive market strategy, which is referenced in its latest accounts.

‘The business is facing considerably competitive pressure… which led to a fall in gross written premiums caused by what it called a marginal fall in the insurance rates it charges’.

In response to queries from this newspaper, FBD said it would not be appropriate to discuss the individual case as the matter is the subject of legal proceedings.

‘We understand differing points of view exist on our business interruption cover,’ a spokesperson said.

‘However, FBD is clear on our responsibilities as they relate to business interruption in our insurance policies.

‘FBD business policies are designed around the needs of our business customers.

‘Protection against the financial consequences of a pandemic, or from measures taken at a societal level to contain a pandemic, is not a risk which has been anticipated by us or our customers or could be provided for within our risk appetite. A pandemic is simply not an insurable event as a broader market offering for FBD Insurance.

‘The business interruption clause listed in our insurance policies is provided for a different set of circumstances localised to individual premises. This is a matter that is the subject of legal proceedings and FBD will be guided on how it is determined by the courts.’

The spokesperson added that FBD believes the court process is the

Stunned when the insurer refused to pay

‘A pandemic is simply not an insurable event ’

most appropriate and fairest way to resolve any uncertainty in respect of their public house policies.

‘We do not underestimate the impact the Covid-19 pandemic has had on businesses and the considerable stress business owners are under,’ the spokesperson said.

‘We do understand the significant challenges publicans and business owners currently face.

‘As the situation evolves, FBD will play our part.

‘To date we have undertaken a number of initiatives for businesses which have closed.

‘These include premium partrefunds and the suspension of cover reductions, as well as flexibility where a business may be encountering financial difficulties.

‘We have begun the processing of refunds for affected businesses and expect to return €7m to our commercial customers.

‘We continue to work with all customers to support them through this difficult time.’