UK eateries take on insurers for losses in lockdown

● Some of the world’s biggest insurers are bracing as a second wave of multimillionpound lawsuits, brought by struggling British pubs, restaurants and bakery chains over lockdown losses, start hitting London’s courts this week.

Zurich, MS Amlin, Liberty Mutual, Allianz and AXA are among those due in court one year after Britain’s Supreme Court ruled that many insurers had been wrong to deny thousands of companies, battered by the pandemic, business interruption payouts.

Insurers have paid out £1.3bn (about R26.6bn), according to the Financial Conduct Authority. But the ruling did not cover all policy wordings and, where it deemed claims valid, some companies are now disputing payout levels.

Companies and insurers have been at loggerheads over whether business interruption policies provide cover for Covid-related losses since lockdowns in March 2020 shuttered shops, bars and restaurants.

Corbin & King, owner of London’s Wolseley and Delaunay restaurants, starts off with a high court trial tomorrow that has been accelerated through the courts because of its interest to other policyholders.

It is suing AXA for about £4.5m in a dispute that hinges in part on the scope of “denial of access” cover, designed to protect insured venues that are shut by public authorities on health grounds.

Other businesses have tens of millions of pounds riding on the outcome of the case, said Mark Pring, partner at law firm Reed Smith. “We have clients sitting there who are very interested because their wordings are either materially similar or overlap.”

Three other companies are also taking on their insurers in closely watched disputes that focus in part on the aggregation of losses — whether policies have been triggered multiple times during the pandemic and qualify for multiple payments.

Slug & Lettuce, owned by Stonegate, Britain’s largest pub group, is bringing an £845m claim against Zurich, MS Amlin and Liberty Mutual, which insured 760 of its 4,500 venues. A trial, which will also examine whether state support payments can be deducted from claims, is due in June.

The three insurers allege their liability is limited to £17.5m, of which £14.5m has been paid, according to court documents.

Multimillion-pound claims have also been filed by sandwich chain Greggs against Zurich.