pandemic insurance

FBD says it does not insure against pandemics and nobody in Ireland had ever asked for it before

A number of publicans have taken the insurer to the Commercial Court.

INSURER FBD DOES not and has never provided cover for pandemics and no one in Ireland has ever asked for it, the Commercial Court has heard.

In actions which have implications for over 1,000 bars and restaurants where four publicans have sued FBD over its refusal to indemnify them for losses suffered due to the Covid-19 pandemic, the insurer’s lawyers said that insurance policies that cover such events are highly specialised.

Declan McGrath SC for FBD, which is opposing the publicans’ claims said part of its case is that the general insurance market in Ireland does not insure against events like pandemics.

Only specialist brokers, which he said are based overseas, offer an insurance policy that covers the fall-out from something like Covid-19.

Evidence would also be given to the court that nobody has ever asked FBD for a policy that covers against a pandemic like Covid-19, counsel added.

In his submissions to the court, counsel added that in support of their claims the publican’s lawyers says the claims are similar to those considered by the English High Court earlier this year.

That court ruled in favour of the UK’s Financial Conduct Authority (FCA), which brought the case on behalf of the policyholders, on the majority of the key issues, counsel said.

In particular, they ruled that payouts were triggered under certain “non-damage” clauses that covered disease and denial of access to business premises.

Counsel said that the court was being asked by the publican’s lawyers to “rubber stamp” the UK decision.

Speaking on the second day of the action Mr McGrath said that a considerable amount of reliance had been put on this case.

Counsel said that decision should not be followed by the Commercial Court. The UK’s decision is under appeal to that country’s Supreme Court and the finding was different in several ways to the claims before the Commercial Court.

The actions before the court have been taken by Dublin bars Aberken, trading as Sinnotts Bar; Hyper Trust Ltd, trading as ‘The Leopardstown Inn’ and ‘Inn on Hibernian Way’ Ltd trading as Lemon & Duke.

The fourth action is by Leinster Overview Concepts Ltd, which trades as Sean’s Bar, in Athlone, Co Westmeath.

They claim that under their policies of insurance taken out with FBD they are entitled to have their consequential losses covered by what they claim is an insurable risk.

They also claim that the insurer is in breach of contract.

The publicans 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, who in April informed the pub owners that a pandemic does not fall within the scope of the clause.

FBD says the closures did not occur as a result of an outbreak of disease at the premises or areas where the pubs are located.

Also today, Mr McGrath raised FBD’s concerns about media reports that referred to detailed matters contained in documents discovered during the pretrial process.

Counsel said that the court had received the materials, which were not to be considered opened before the court, and therefore should not have been placed in the public domain.

FBD, counsel said, is concerned about this, and said this was possibly in breach of implied undertaking.

While there could be a reasonable explanation as to what had occurred, his side wanted to know who provided the media with the material.

Mr Justice Denis McDonald said it was a very serious matter if the implied undertaking given has been breached in any way, and while he was not looking at any party the matter needed to be investigated.

In reply, Michael Cush SC for the three Dublin-based publicans said the matter was being taken very seriously, and would try to resolve the issue with FBD’s lawyers.

A letter from his clients had been sent to FBD’s lawyers in response to the alleged breach, the court heard.

The parties agreed to liaise with each other over the matter, and the judge hoped that this particular issue concerning the undertaking would be dealt with as soon as possible.

The hearing continues.

Aodhan O Faolain