UK pub group Stonegate is suing insurers MS Amlin, Zurich Insurance and Liberty Mutual for £1 billion in a new major COVID business interruption (BI) case.
Reuters, which first covered the story, speculates that the Stonegate case, if successful, could provide momentum for a second wave of pandemic claims against insurers.
The UK’s original BI test case concluded in January 2021, after the Supreme Court uphold an earlier ruling that sided with policyholders on a number of key issues.
This was ultimately seen to cost billions for re/insurers, harm their reputations and impact premium prices, and analysts warn that more of the same could be expected if others choose to follow Stonegate’s lead.
Stonegate claims that its business dropped by up to 90% below projections during the height of COVID restrictions in the UK, with its 750 insured venues having to contend with different regional rules simultaneously.
It further argues that its business continues to be affected by the pandemic and that business interruption issues are set to continue through to April 2023.
Reuters reports that insurers had previously accepted that Stonegate’s BI policies were valid, but had limited cover to just one payment of £2.5 million.
In total the insurers have paid £14.5 million pounds, including £12 million for additional increased costs of working (AICW), and say their liability is limited to £17.5 million pounds.
Court filings show that Stonegate’s insurers consider the pub group’s claim to be “hugely overstated” as they prepare to enter another legal battle.
MS Amlin is responsible for 55% of Stonegate’s policy, with Zurich and Liberty Mutual accounting for the other 22.5% each.