Wahaca launches legal action against insurer over Covid payouts

Wahaca has become the latest hospitality group to take its insurance company to court for failing to pay out for losses incurred during the coronavirus pandemic.

Legal website Law 360 reported the Mexican restaurant chain filed a High Court claim against QIC Europe on 24 May.

Wahaca was forced to permanently close 12 restaurants through a Company Voluntary Arrangement (CVA) in 2020 after the pandemic hit trading. The group now runs 13 restaurants in London, Brighton, Cardiff, and Edinburgh and said last year it was looking to expand.

Hospitality businesses have launched multiple legal challenges since the pandemic, when many insurers refused to pay out when the government ordered restaurants, hotels and pubs to shut their doors under coronavirus restrictions.

Fuller’s, which runs almost 400 pubs in London and southern England, confirmed it had started legal action against Liberty Mutual and Aviva earlier this year.

Last year, restaurant group Corbin & King – now named the Wolseley Hospitality Group - won its High Court battle with insurer Axa while Lake District hotel 1863 Restaurant with Rooms won a six-figure payout from RSA.

A test case against insurer Hiscox in 2021 saw 72 claimants secure a settlement worth more than £5.2m.

Legal experts told The Caterer that Corbin & King’s victory, which hinged on the business receiving £250,000 per site for each period of enforced closure, could lead to other operators with similar policies securing larger payouts.

Wahaca and QIC did not respond to requests for comment.