The Stonegate Group, which has a UK leased, tenanted and managed pub estate of 4,500, is suing a trio of insurers for losses it suffered during the pandemic. The company, which is backed by private equity group TDR Capital, is seeking £845m in a claim filed at London’s High Court against MS Amlin, Liberty Mutual Insurance Europe and Zurich. An insurance policy covering business interruption and related losses has been triggered multiple times during the coronavirus crisis, Stonegate argues in court documents.
In the court documents, Stonegate estimates its total business interruption and related losses between February 2020 and April 11 2021 reached £481m. It projects further losses from April 2021 to 2023 – the indemnity period under the policy – could reach £365m. It claims that it is entitled to make business interruption claims under policy clauses covering the presence of a notifiable disease in the vicinity of its outlets, as well as claiming for denial of access to its premises and enforced closure.
Stonegate also says that the insurers do not dispute that the policies should have paid out, but contend their liability is limited to £17.5m, of which £14.5m has already been paid.
As repeated lockdowns from March 2020 forced pubs and restaurants to close, the question of whether so-called business interruption policies should pay out has been at the epicentre of a stand-off with insurers. Various Eateries, which owns the Strada restaurant chain and the Coppa Club, has also filed a £16.3m lawsuit against its insurer Allianz in a dispute over its business interruption policy. According to the claim, Allianz contends its liability is limited to £2.5m.
Hugh Osmond, the founder of Various Eateries. Corbin & King, the owner of London restaurants including The Wolseley and The Delaunay, and a group of hoteliers led by Black & White Hospitality, which operates the Marco Pierre White restaurants, are also pursuing claims against their insurers tied to the pandemic.
The string of cases follow a landmark ruling by the UK’s Supreme Court in January which found that many business-interruption policies should have provided cover against the financial losses inflicted by the crisis. The test case was brought by the Financial Conduct Authority on behalf of 370,000 affected policyholders. It was relevant to up to 700 types of policies issued by as many as 60 insurers.
But as the ruling only covered certain policy wordings, hospitality groups have since brought cases in an effort to prove that their insurance should also have paid out – and in some cases arguing that each premises represents a separate insured loss.