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Law360, London (May 26, 2020, 1:58 PM BST ) An Irish insurer said on Tuesday it will wait to learn the result of a test case in October before it decides whether to pay out on 700 claims for business interruption made against it in connection with the pandemic.
The insurer plans to use court cases due to be heard in October as a test for its obligations under policies for claims over interrupted business. (AP)
The insurer said the judgment will determine liability for its other clients with business disruption insurance, who will not have to pursue their cases through the courts. FBD said it is "strongly of the view" that its policies do not offer protection from losses linked to the pandemic.
FBD is one of Ireland's biggest domestic insurers, providing farm insurance as well as business cover to more than 1,300 small pubs. The country's pubs suffered from lost business as a result of the lockdown, which started on March 12, five days before St Patrick's Day celebrations got under way, and has only just started to ease.
"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 insurer said in a statement.
The company did not respond immediately to a request for comment over its legal representation.
The policyholders are the operators of three Dublin pubs, the Leopardstown Inn, Sinnotts Bar and the Lemon & Duke, and Sean's Bar in Athlone, central Ireland.
Business interruption policies typically offer protection only when damage to property — for instance, from a fire — forces the company's premises to temporarily cease trading.
Some policy extensions offer protection if a public authority orders the premises to be shut after the outbreak of an infectious disease. Claimants say those extensions provide them with cover in the case of a pandemic, but insurers say the policies were intended to cover limited outbreaks of viruses on site.
Litigation is on the rise in Europe and the U.K. in response to insurers refusing to pay out on claims under business interruption policies.
In a separate move on Tuesday, AXA's chief executive told a French broadcaster that the company will pay most business interruption claims to restaurant owner customers who had similar policy wordings, after it lost a court battle in Paris last week. A spokesperson for the company did not respond to a request for comment.
In the U.K. the Financial Conduct Authority is pursuing a test case over the policy wording of several insurers, with the results becoming legally binding on those insurers.
Alongside that, hundreds of small businesses have launched group litigation against insurers Hiscox, RSA, Aviva and QBE over refusal to pay claims.
The cases are: Hyper Trust Ltd. T/A The Leopardstown Inn v. FBD INSURANCES PLC, case number 2020/3656 P; Leinster Overview Concepts Ltd. T/A Sean's Bar v. FBD Insurance PLC, case number 2020/3453 P; and Inn on Hibernian Way Ltd. T/A Lemon & Duke v. FBD Insurance PLC, case number 2020/3402 P, all in the High Court of Ireland.
Full counsel details were not immediately available, but all claimants with the exception of Sean's Bar are represented by barrister Michael Cush, SC.
--Editing by Ed Harris.
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