Brewery Settles £1.7M Lawsuit With Insurer for COVID-19 Lockdown Losses

Northeast England-based pub chain Camerons Brewery Ltd. has settled a lawsuit with its insurer Royal & Sun Alliance (RSA), which argued that RSA should be responsible for covering the pub’s £1.7 million losses that came as a result of COVID-19 closures.

The confidential agreement was reached last week, Law360 reports.

Camerons had made claims of £100,000 (the maximum amount for RSA’s business interruption insurance) totaling £1.7 million for its dozens of pubs, which were all forced to close with the pandemic.

In November, the company argued in the High Court that RSA’s policy covered losses if a pub or bar was forced to close by the government due to an infectious disease, Law360 reports. Camerons suffered continued closure due to possible staff infections and government restrictions on size and layout.

However, RSA argued that it was not liable for any of the losses as it only covered closures that occurred as a result of an outbreak on the premises. It added that the policy was limited to a £100,000 payout for business interruption, and even if Camerons was eligible for that payout, it would not get the full amount given most customers were staying at home regardless of whether the pub was open or not.

In January, the Supreme Court upheld a High Court decision that largely supports policyholders in a fight with insurance companies for business interruption payouts, saying that insurers should pay out if the occurrence of COVID-19 within the vicinity was a cause of business interruption losses, Law360 reports.

In the United States, a number of companies are fighting the same battle against insurers for business interruption insurance. In April, a group of Chicago restaurants lodged lawsuits against Society Insurance Inc., alleging their business interruption claims for losses during COVID-19 closures were wrongly denied.  

Going on the offensive, UK insurance company Beazley Underwriting filed a lawsuit in April against LA Fitness contending that the gym chain cannot use its $100 million business interruption insurance policy to cover COVID-19 losses.  

Beazley, one of the many companies that insures the gym chain with 700 locations in the US, argues that the owner of LA Fitness, Fitness International LLC, should be barred from using the policy to cover business losses it suffered due to COVID lockdowns issued in various locations throughout the past year. 

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!

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