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Stonegate Pub Company has lodged an £845 million lawsuit against its insurers claiming they failed to properly calculate their losses during the pandemic.
Stonegate Pub Co, which runs more than 700 establishments in the UK, filed the lawsuit only recently made public in High Court in March, reports Law360. The company claims that, though its insurers, including MS Amlin, Liberty Mutual Insurance Europe SE and Zurich Insurance PLC, have not disputed its business interruption insurance claims, they have offered only a fraction of the payment Stonegate says it is entitled to under its business interruption insurance policies.
Business began to decline in January 2020 after the first case of COVID-19 was reported in the UK, says Stonegate Pub Co’s lawsuit. Then government mandated lockdowns shuttered Stonegate Pub and thousands of other businesses for months. At the same time, the World Health Organization (WHO) declared COVID-19 a global pandemic.
Stonegate Pub Co says that each of these events should have triggered its business interruption insurance policies for tis hundreds of pubs and bars; however, the insurers are allegedly claiming that they owe a mere fraction of the company’s claims.
The lawsuit accuses MS Amlin, Liberty, and Zurich of offering only a £17.5 million payout – £14.5 million of which has already been paid.
At the heart of the lawsuit are the “perils” provided for under the terms of Stonegate Pub’s business interruption insurance policies.
“For the purpose of the disease peril, the relevant insuring clause is triggered each time the business at an insured location is interrupted or interfered with as a result of COVID-19”, states the lawsuit.
Stonegate Pub asserts that each of the insurers are obligated to pay claims for each of its venues for three separate perils – the outbreak of COVID-19 in the UK, government mandated lockdowns, and for other regulations put in place that limited access to businesses.
“Each of the insured locations has … suffered enforced closure by a government authority for health reasons, namely due to COVID-19”, says Stonegate Pub Co in its lawsuit.
Stonegate Pub’s lawsuit does not describe how the insurance companies calculated their business interruption payouts, but the company is far from the first UK business to accuse the industry of improperly handling such claims.
Do you own a business that has a business interruption insurance policy? Have you claimed that policy for COVID-19? Let us know in the comments section!
The Stonegate Pub Company is represented by Paul Reed QC, David Pliener, and Louis Zvesper of Hardwicke, and Adam Kramer QC of 3VB, instructed by Fenchurch Law Ltd.
The Stonegate Pub Business Interruption Insurance Lawsuit is Stonegate Pub Company Ltd. v. MS Amlin Corporate Member Ltd., et al., Case No. CL-2021-000161, in the High Court of Justice of England and Wales.
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