UK restaurant and bar group’s ‘substantial’ claim highlights how hospitality businesses are having ‘to fight tooth and nail to obtain an indemnity’, says company director
CG Restaurants and Bars – the parent company of cocktail bar chain Dirty Martini, as well as other bars and restaurants across the UK – has teamed up with law firm Edwin Coe to launch and lead an action group against insurers RSA and QIC Europe, in a bid to recover business interruption (BI) losses experienced as a result of the Covid-19 pandemic.
The legal proceedings will focus on recovering indemnity for the multiple lockdowns that were instated in 2020 to help mitigate the spread of coronavirus, rather than just focusing on the single, initial lockdown period that formed the focus of the FCA’s test case.
Daniel Coffer, director of CG Restaurants and Bars, said: “Hospitality businesses have had to fight tooth and nail to obtain an indemnity from their insurers, notwithstanding the clear terms of the policies they purchased prior to the pandemic.
“This has been a horrendous time for the hospitality sector and it will continue to be difficult in the near future.
“The continued effect of the new Omicron variant only highlights the need for members of the hospitality sector to take action to recover the sums to which they are contractually entitled.
“Our claim alone is substantial and there are others who no doubt have similar sized claims who need the protection that this class action will afford.”
Ignoring the ‘reality’ of policy wording
Roger Franklin, head of the insurance group at Edwin Coe, explained that the action group aims to demonstrate that the RSA 3 BI insurance wording “gives rise to multiple indemnity periods and thus, potentially, responds to all the lockdowns and restrictions experienced by the hospitality sector in 2020”.
He continued: “The purpose of this action group is to establish the precedent that the RSA 3 wording, which is underwritten by RSA and QIC Europe, gives rise to multiple indemnity periods and thus, potentially, responds to all the lockdowns and restrictions experienced by the hospitality sector in 2020.
“So far, insurers have indemnified their insureds for lockdown one only, but that ignores the reality of the policy wording and the government’s response to increasing cases of Covid-19 throughout 2020.”
Edwin Coe is also involved in a BI-related test case against insurer Axa on behalf of the owners of The Wolseley restaurant – this is due to be heard at court by the end of January 2022.
A spokesperson at QIC Europe said: “QIC Europe is committed to delivering on our promise to our policyholders and paying all valid claims promptly.
”As a matter of policy confidentiality, we cannot comment on individual cases. We can confirm that we have been making interim payments where appropriate and in accordance with case law and guidance issued by the FCA.”
RSA declined to comment.