Court hears 1,100 pubs affected by Covid insurer dispute

A branch office of FBD Insurance near Baggot Street Bridge, Dublin.

Insurer FBD's reasoning for not paying out business-interruption claims caused by the Covid-19 pandemic to publicans are "plainly wrong" and "make no sense", the commercial court has heard.

In what is seen as important test cases, lawyers representing four publicans have brought cases challenging FBD Insurance's  refusal to indemnify them, and the insurer’s stance that its policies of insurance do not cover the disruption caused to businesses by Covid-19.

Opening the action, Michael Cush SC, who is representing three Dublin-based pubs said FBD’s refusal to indemnify his clients for losses incurred due to the pandemic, was on grounds that the policies do not cover, national or widespread outbreaks of a disease that result in the closure of a business.

FBD claims the policy only covers closure orders made following localised events, and that an event such as the pandemic is not covered. That interpretation, counsel said, was “clearly wrong”.

What FBD seemed to be saying is that “the more widespread the peril” then the higher the likelihood that cover does not have to be provided.

That position, counsel submitted, “makes no sense.” 

Counsel told Mr Justice Denis McDonald that 1,100 pubs and bars are affected by the dispute which arose after the insurer refused to provide them with cover since the pandemic resulted in the temporary closure of businesses in mid-March.

Counsel said the outcome of the case is also relevant to many other businesses and insurers and not just publicans.

The focus of the cases before the court was the interpretation of the insurance policy and not the impact on the publican’s business or on the insurer’s business, he said.

The actions before the court have been taken by Dublin bars Aberken, trading as Sinnott's Bar; Hyper Trust Ltd, trading as The Leopardstown Inn; and Inn on Hibernian Way Ltd trading as Lemon & Duke, represented by Michael Cush SC.

The fourth action is by Leinster Overview Concepts Ltd, which trades as Sean's Bar, in Athlone, Co Westmeath, which is represented by Eoin McCullough SC.

The publicans also claim the insurance policies taken out with FBD have a clause that states the pub owners will be indemnified if their premises are closed by order of the local or government authority if there are "outbreaks of contagious or infectious diseases on the premises or within 25 miles of same."

That interpretation of the clause is disputed by FBD, which in April informed the pub owners that a pandemic does not fall within the scope of the clause.

FBD, represented by Declan McGrath SC, says the closures did not occur as a result of an outbreak of disease at the premises or areas where the pubs are located.

The closures occurred as a result of measures taken at a national level that involved a nationwide closure of business.

Mr Cush said the core issues in the cases include whether any cover  had been triggered by the pandemic, and if so what is the ambit of cover provided by the policies.