Corbin & King wins High Court battle over business interruption insurance

Restaurant group Corbin & King has won its High Court battle with insurer Axa in a ruling that could have ramifications for other hospitality firms with similar policies.

Owner Jeremy King said he was “delighted” with the judgement and had been determined to “fight for justice” for the hospitality industry.

Corbin & King brought a lawsuit against Axa when it refused to pay out to cover Covid-related losses.

The restaurant group’s fight related to ‘non-damage denial of access' cover, a type of business interruption policy that protects companies against their sites being shut by a statutory body because of a local danger or emergency. According to the Financial Times, Corbin & King's claim was around £4.5m.

Axa said the policy only provided a narrow, localised form of cover and “in no reasonable sense” could the state of affairs brought about by a national pandemic be described as a “danger” to the restaurant premises or within one mile of them.

Corbin & King argued that from March 2020 there was a “danger” of actual or threatened coronavirus cases to the restaurants and it was not a requirement of the policy that this should be only be within a one-mile area.

In her judgement handed down on 25 February, Mrs Justice Cockerill ruled in Corbin & King’s favour and said coronavirus "led to the regulations which caused the closure of the businesses and caused the business interruption loss.”

The case also considered whether Corbin & King’s coronavirus insurance cover was limited to just £250,000 for all eight premises in the dispute, as Axa had argued, or whether it was entitled to up to £250,000 for the group as a whole. There was also debate over whether the policy should pay out to cover the impact of multiple lockdowns and restrictions.

The judge ruled in the restaurant group’s favour and said Axa should pay out a maximum of £250,000 for each of Corbin & King’s premises for the impact of each separate lockdown and period of restrictions in 2020.

The judge also said Axa was bound to pay damages due to its “wrongful failure” to previously cover the impact of the closures and restrictions.

King said in a statement: “Naturally I am delighted with Mrs Justice Cockerill’s Judgement. I am not a confrontational person, but I felt that the hospitality business had been badly served by insurers during the pandemic and was determined to fight for justice - not only for Corbin & King but for our industry as a whole.

“I was fortunate to be aided in this by our QC: Jeffrey Gruder, solicitor: Roger Franklin of Edwin Coe, and loss assessor: Jonathan Samuelson of Harris Balcombe.”

An Axa spokesperson said: “We note the court’s decision and will give it careful consideration. We have been working with our customers and paying claims on policies where there is valid cover since the start of the pandemic, and we will continue to do so.

“We have already paid claims totalling above £97m to date, demonstrating that where cover is in place claims have been, and will continue to be, settled by Axa.”

In January 2020 a test case in the Supreme Court found that certain types of insurance policy should pay out for Covid disruption. However, it did not cover all types of policy and has prompted a fresh round of legal action.

Corbin & King’s case is expected to have consequences for other businesses with the same policy wording, which include London bar operator Inception Group.

Gruder QC said in a LinkedIn post: “This decision provides renewed hope to countless policyholders who have suffered serious losses as a result of the Covid-19 pandemic and have seen their claims denied by insurance companies.”