Corbin & King insurance ruling could lead to higher pay-outs for other hospitality businesses

Corbin & King’s victory over its insurance company in the High Court could lead to other hospitality operators with similar policies securing larger pay-outs, a legal expert has said.

Sonia Campbell, partner and head of insurance disputes at Mishcon de Reya, said the ruling meant businesses with multiple premises may be able to “recover significantly more from insurers”.

As part of a judgement handed down on Friday, the High Court ruled that insurer Axa should pay out to cover losses incurred due to repeated coronavirus lockdowns throughout 2020. It rejected Axa’s argument that Corbin & King’s claim was limited to £250,000 for the whole group, and instead said the restaurant group could claim for £250,000 per premises for each period of closure.

Campbell added: "This is another success for policyholders and a step in the right direction for insureds who have composite insurance policies containing this form of 'denial of access' wording.”

The ruling on business interruption insurance has been welcomed by other hospitality groups mounting their own legal action. Rob Atkinson, legal director at Black and White Hospitality, which is leading a campaign against insurer Tokio Marine Kiln, said: "We are delighted that the Court has found in favour of Corbin & King in a resounding victory for policy holders.

“In particular they noted that policies should be read from the viewpoint of a business person, not a lawyer attempting to disapply the wording.

“The decision has a positive impact on our own test case, both generally and in relation to specific points. It is a matter of deep regret however that us and other policy holders are still being forced to resort to legal action instead of insurers doing the right thing."

Edwin Coe, the law firm that represented Corbin & King, in January announced the formation of an action group against insurers RSA and QIC led by CG Restaurants and Bars, owner of the Dirty Martini brand.

Roger Franklin, head of Edwin Coe’s insurance litigation team, said Friday’s ruling was a “very important step” for other policyholders. “Those in the hospitality sector have been particularly hard hit, and this decision will be significant for many of them,” he said.

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