1863 Restaurant with Rooms wins six-figure coronavirus insurance payout

A Lake District restaurant and hotel has won a six-figure coronavirus insurance payout for business interruption following a landmark court ruling on the issue.

The 1863 Restaurant with Rooms in Pooley Bridge secured the sum, which was not disclosed, from insurer RSA.

Owners Mark and Anne Vause have run the business, which includes seven en-suite bedrooms and a bar and restaurant, since February 2008. They employ around 20 staff and the business generates turnover of almost £1m a year.

Mark, 54, said the venue had enjoyed “massive growth” before the pandemic forced it to close in March 2020.

It reopened several months later with capacity reduced from 32 covers to 16 with the bar remaining closed.

The business had to completely shut over Christmas and New Year 2020 due to a staff member testing positive for coronavirus, and then was forced to close under lockdown restrictions until May 2021.

Under their specialist guest house insurance policy, the couple were covered for loss of gross profit in the event of business interruption due to infectious and contagious diseases on the premises during the periods from March to August 2020 and January to April 2021.

Mark said: “I’m delighted with the outcome. Without it, we could not have continued as we were. We would probably have lost the restaurant and gone back to being purely a guest house, which would have been an extremely sad and backward step.”

Claire Barnes, commercial disputes partner at Taylors Solicitors, acted on behalf of the couple.

She said the claim was backed up by a recent legal battle between restaurant group Corbin & King and Axa, where the High Court ruled the insurer should pay out for losses incurred during multiple pandemic lockdowns.

Barnes added: “I argued that a non-damage denial of access clause – an NDDOA – which some insurers were relying on to resist claims – did provide cover for losses where access to the business premises was restricted or hindered due to government action in response to the pandemic. The Axa case confirms my stance and should ensure more claims are now successful."

It was expected that Corbin & King’s victory could lead to higher payouts for other hospitality businesses with similar insurance policies.

Barnes added: “I would recommend that anyone who might initially have been knocked back by insurers should review their policies and check for any NDDOA clauses.”