It has left the cinema with almost no income and 196 staff on furlough, but Covid-19 was not on the list for named diseases in the policy extension 

Independent cinema chain – Reel has been refused an insurance pay out of up to £7m by AXA after all non-essential businesses were forced to shut down due to the coronavirus lockdown.

The cinema’s director claims that AXA said that the chain’s denial of access cover would pay out for these losses caused if a statutory authority ordered screens to close.

The lockdown has been from March 20 leaving Reel with almost no income and forcing it to furlough 196 of its 235 employees, this is according to The Telegraph.

Dangerous precedent 

Meanwhile David Williams, managing director, underwriting and technical Services, AXA Insurance (UK) said: “The Denial of Access cover applies for actions taken by the police or any other statutory body in response to a danger or disturbance at the premises or within a one-mile radius. The national lockdown is not a response to a specific incident at a Reel cinema or its vicinity. It is an attempt to contain the spread of a virus across the country. And unfortunately, no cover applies in this instance.

”As for the disease extension, this applies to named diseases – and Covid-19 is not on the list. The Business Interruption section of a policy is not designed to make up any shortfall due to macroeconomic trends, recession, changes in fashion, buying patterns or government policy. Of course, we feel for businesses facing difficulties. However, far from helping them, waiving policy wordings would set a dangerous precedent. At the moment, all our efforts are focused on supporting our customers through extended cover and flexible payment options. That is how we’re adapting to this unprecedented situation.”

An update on the Reel cinema website stated: “We would like to thank all our valued customers during a very difficult time. You have been amazing. With immediate effect we are to close all our cinemas until further notice as advised by the prime minister.

”If you have tickets booked within a month, we will contact you in order to provide you with a refund. If you have any queries, please use our contact page on our website. We will update you on the situation through our website and social media.”

The news follows Hiscox being accused of denying business interruption payouts. 

Read more…Businesses risk underinsurance due to differing unoccupied property exclusions 

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