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High Court backs publicans in insurance case

Insurance group FBD has said it will now start settling claims made by publicans for losses due to business interruption as a result of COVID-19 restrictions.

This follows a High Court ruling this morning (5 February) in favour of four pub owners involved in a test case.

FBD, which has already set aside €30 million due to the uncertainty over the issue, had argued that its business insurance policies do not cover events such as the pandemic.

But Mr Justice Denis McDonald ruled that the businesses were entitled to be compensated under their policies for the disruption caused by COVID-19 restrictions.

FBD said it intended to start the process of settling claims for the customers involved, which will include interim payments in the short-term as it awaits final clarity on costs.

Central Bank welcomes judgment

Disagreeing with FBD’s interpretation, the judge said cover is not lost where closure is prompted by nationwide outbreaks of disease, provided there is an outbreak within a 25-mile radius and that outbreak is one of the causes of the closure.

He said the issue of quantifying losses would be dealt with at a late date.

The Central Bank, which has also been examining the issue, said it welcomed the judgment. "We will be closely examining the potential impact of this judgment for customers in the context of our sustained and ongoing engagement with relevant firms," it said in a statement.

UK Supreme Court decision

The High Court judgment had been deferred last month in order to allow lawyers for the parties to make further legal submissions arising from a UK Supreme Court decision in a similar case.

The London court had also ruled in favour of firms affected by COVID-19 restrictions who were seeking to claim for losses under business interruption clauses.

This followed a test case brought to the High Court in London by the Financial Conduct Authority (FCA) with the agreement of eight insurance companies.