UK pubs giant takes on insurer trio in $1.2 bln COVID trial
13/06/2022 14:23
* Trial kicks off against Zurich, Liberty Mutual, MS Amlin
* Slug and Lettuce chain owner sues for 1.0 bln pounds
* Says business interruption policies were triggered
multiple
times
* Insurers say claim "hugely overstated" - court documents
* Claim is largest since Supreme Court ruling last year
By Kirstin Ridley and Carolyn Cohn
LONDON, June 13 (Reuters) - Britain's biggest pubs group
Stonegate, which is suing Zurich Insurance ZURN.S and two
peers for 1.0 billion pounds ($1.2 billion) over lockdown
losses, battled the COVID-19 pandemic "day by day, venue by
venue", a London trial heard on Monday.
Ben Lynch, a lawyer for Stonegate, said the company's 760
insured pubs, bars and night clubs at the centre of the case had
each faced separate challenges, opening and shutting at
differing times according to regional rules - and seeing
business drop by up to 90% below projections.
If successful, the Stonegate case could give fresh momentum
to a second wave of claims against insurers that might cost the
industry billions of pounds, further damage reputations and push
premiums even higher for businesses and consumers, experts say.
Stonegate is suing Zurich Insurance, Liberty Mutual
LBRTML.UL and MS Amlin MITSID.UL , alleging the pandemic,
government-ordered closures and restrictions triggered business
interruption cover multiple times and that the interruption and
interference will continue until April 2023.
Insurers accept Stonegate's businesses were covered by their
policies, but contend that cover was limited to one business
interruption payment of 2.5 million pounds, which has been paid,
court documents show.
In total the insurers have paid 14.5 million pounds,
including 12 million for additional increased costs of working
(AICW), and say their liability is limited to 17.5 million
pounds. They label the claim "hugely overstated", filings show.
The case is by far the largest since the Supreme Court ruled
last year that many insurers had wrongly rejected business
interruption claims from thousands of small businesses that had
to close or restrict trading to curb the coronavirus.
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Policyholders have so far received nearly 1.35 billion
pounds in compensation. But not all policy wordings were covered
and, where they were, some dispute payout levels.
Other insurers are following the Stonegate case closely.
Asked if their employer was among those being sued, a
representative from one insurer watching proceedings told
Reuters: "No, not yet."
Insurers have been on notice since Corbin & King, the owner
of London's Wolseley restaurant, won a similar BI case against
insurer Axa AXAF.PA in February - although it has since gone
into administration after a battle with its biggest shareholder.
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Multi-million pound claims by sandwich-to-pasty chain Greggs
GRG.L against Zurich and Strada and Coppa Club owner Various
Eateries VAREV.L against Allianz ALVG.DE will be heard next
month.
($1 = 0.8212 pounds)
(Reporting by Kirstin Ridley, additional reporting by Carolyn
Cohn; Editing by Emelia Sithole-Matarise)
((kirstin.ridley@thomsonreuters.com; +44 (0) 207 513 5666;))