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Business Interruption Insurance and Covid19, Publicans V FBD – Decision Due in January 2021

Stuart Insurances

23 Nov 2020

Business Interruption Insurance and Covid19, Publicans V FBD – Decision Due in January 2021

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Last month the high court heard deliberations in relation to the challenge that Business Interruption Insurance cover should apply in respect of the Covid19 pandemic under the wording of certain FBD insurance policies. 

There has been a lot of attention recently over the issue of whether businesses are covered by the Business Interruption section of their commercial insurance policies for financial loss as a result of the business being closed due to the Covid19 Pandemic.

The recent cases before the courts were taken by various publicans who were Insured with FBD, and in many cases they did not obtain the advice or services of an Insurance Broker in relation to placing the cover.

The Lemon and Duke in Dublin 2, Sinnotts pub in Dublin 2, The Leopardstown Inn in County Dublin and Sean’s Bar in Athlone are four of the pubs concerned. 

Other pubs in dispute with FBD are The Bath Pub and The Old Spot, both on Bath Avenue, Dublin 4, the Landmark pub, Dublin.

Declan McGrath SC for FBD stated that it is FBD’s case that its policies of insurance do not provide cover for pandemics, and that the policy only covers localised outbreaks of disease.

On the other hand, the publicans claim that 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” . 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.

The pandemic has had drastic consequences for the Irish pub industry, given that they have been closed for such a long time with no end in sight. 

Many Insurers who feel that their Business Interruption wording could be open to interpretation have since changed their wording to ensure that for any future events that there will clearly be no cover for pandemics or lockdowns as a result.

In the case of the various publicans V FBD, the three-week hearing concluded in late October and the presiding judge Mr Justice Denis McDonald said he hoped to be in a position to deliver his decision in Mid-January 2021. 

Surely all publicans and many of the other Insurance Companies will be watching anxiously in January 2021 to see what the courts determine in relation to these cases, and indeed they and other parties consider if there is any potential for wider implications as a result of the court’s decision.