Nightclub boss to test insurers at high court
A SCOTS nightclub owner is to form the vanguard of a legal bid for justice after insurance firms refused to pay thousands of firms.
Donald MacLeod took out expensive cover against the outbreak of contagious disease that might affect his business.
He believes hundreds of Scots jobs will be on the line if insurers get off with paying out.
His Hold Fast Entertainment will be used as a test case for City watchdog the Financial Conduct Authority at the High Court in London next month.
The FCA hopes to get a court ruling on the specific wording of MacLeod’s case against QBE, which refers to “any occurrence of notifiable disease within 25-mile radius of the premises”.
MacLeod, who owns The Cathouse and The Garage clubs in Glasgow, stands to lose out on £200,000 if the FCA fails.
He said: “I have been notified that the wording of my policy is one of the ones that will be referred to in any court action.
“In my opinion it was unequivocal and there’s no justifiable reason not to pay out.
“I’ll be delighted if my own case can help pave the way for other payouts. If we don’t get payouts for policies taken in good faith, hundreds of jobs in Scotland could be easily be on the line.”
The FCA action is already representing more than 100 firms and the Night Time Industries Association is urging more Scottish firms to sign up.
Most business interruption policies only cover more common hazards such as fire and flooding. Others promise to cover disruption caused by diseases or pandemics.
The test case at the High Court will look at 17 representative policy wordings, and eight insurers will be defendants.
They are Arch Insurance, Argenta Syndicate Management, Ecclesiastical Insurance Office, Hiscox, MS Amlin Underwriting, QBE, Royal & Sun Alliance, and Zurich.
Policies from Allianz, American International Group (AIG), Aspen, Aviva, Axa, Chubb, Liberty Mutual and Protector also include the wording to be tested in court.
The FCA will say in early July which other companies will also be covered by the eventual ruling.
Christopher Woolard, its interim chief executive, said: “The court action we are taking is aimed at providing clarity and certainty for everyone involved.”