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Hotel operator sues over insurer's failure to pay out on business interruption claim

The hotel operator is seeking damages for breach of contract and negligence.

Image: RollingNews.ie

THE OPERATOR OF a South Dublin hotel has brought a High Court action over its insurer’s refusal to pay out on a claim for business losses caused by the Covid-19 pandemic.

The action has been brought by Premier Dale Limited, trading as The Devlin Hotel in Ranelagh, Dublin 6 against insurance broker Arachas Corporate Brokers Ltd and insurer RSA Insurance Ireland DAC.

The operator claims the refusal to pay out on the business interruption claim has resulted in the hotel business sustaining “massive and mounting losses” without it being able to access funds from its insurer.

The claim, which arises from the hotel having to close its doors last March due to the health emergency caused by pandemic, was admitted to the fast track Commercial Court list this week.

The operator is part of the Press Up group which is one of Ireland largest hospitality operators and employs hundreds of people.

The operator, represented by Paul McGarry SC, with Jack Tchrakian Bl, says that it entered into a contract of insurance with RSA in October 2019.

It claims that under that policy it is entitled to be indemnified in respect of financial losses expected to exceed €1 million arising from interruptions of business at the hotel.

Following the hotel’s temporary closure last March, the operator sought to be indemnified in respect of its losses. Last April RSA informed the operator that it was refusing to pay out.

The refusal by RSA to pay out, the operator claims, amounts to a breach of the insurer’s obligations under the 2019 contract. 

The operator claims that Arachas provided it with advice and other services regarding insurance requirements.

The operator says it relied on statements, representations and advice given to it by the broker in relation to the insurance contract it entered into with RSA. 

In its action, the hotel operator seeks damages for breach of contract, negligence, and negligent misrepresentation.

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The hotel operator also seeks a declaration from the court that it is entitled under the terms of the 2019 insurance contract to be indemnified in respect of the financial losses from the interruptions of business since March 15th 2020.

It further seeks an order restraining RSA from refusing to indemnify the hotel operator and keep it indemnifying the hotel and keep it indemnified in respect of insurable losses.

The case was admitted to the commercial court list by Mr Justice David Barniville following an application by the operator. The defendants consented to the application.

The judge adjourned the matter to a date in November.
 

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