Stonegate to appeal aspects of business interruption insurance ruling

A High Court judgement over business interruption insurance has suggested stringent limits will be put on claims for Covid-19 losses.

An insurer to Stonegate Pub Company has welcomed Monday’s ruling into key areas of an ongoing legal case with the pub group over its coronavirus insurance claims.

The High Court had been asked to determine a £1b claim from Stonegate Pubs against insurers MS Amlin Underwriting Limited, Liberty Mutual and Zurich. Several issues were considered alongside similar cases brought by Greggs and restaurant group Various Eateries.

Stonegate had argued that changing restrictions and multiple government-ordered closures meant that insurance claims would have been triggered multiple times.

But the insurer argued that its cover would be limited to one claim, a single payment of £2.5m.

Judge, the hon Mr Justice Butcher did not agree wholly with the insurer but said there were likely to be only a small number of aggregating occurrences that would allow a new claim to be triggered.

The judgement also found that losses covered by furlough and business interruption payments should be considered in determining claims.

The case will continue, and Stonegate has said it will appeal several points determined in this intermediary judgement.

A spokesperson for the pub group said: “The outcome of this case is far from conclusive. We are pleased that the judge found in our favour on a number of key issues and note that he sided with our insurers on others. In this sense, the outcome is similar to the judgment of the Divisional Court in the test case brought by the FCA last year.

“However, we believe that the court’s interpretation on a number of issues which are generally applicable to policyholders is out of step with the approach taken by the Supreme Court in the test case and with the approach of courts in other jurisdictions, such as on furlough. We intend to appeal those elements of the decision.

“Whilst our recovery from the pandemic has been strong, we cannot ignore the significant disruption caused during the last two years and, along with most businesses in the UK, we are now grappling with inflationary challenges and a cost of living crisis for the UK consumer. In the circumstances, we, and other businesses, are entitled to look to our insurers to provide the cover promised under our policy.”

Johan Slabbert, chief executive officer of MS Amlin Underwriting Limited, said: “We welcome the judgment of the High Court, and believe this brings some genuine clarity to a very complex business interruption case.

“This is a positive outcome for us and is of significance to the entire insurance industry, who I’m sure will be keen to read the full details of the judgment, as issues around furlough payments and aggregation in particular have the potential to have an enormous financial impact for insurers throughout the UK.”