City operator dubs insurer 'morally reprehensible' after no pay-out

By Emily Hawkins contact

- Last updated on GMT

Insurance fallout: operator Charlie Gilkes (pictured) said Inception Group had experienced a 'huge injustice' after claiming its insurer initially claimed there would be coverage for pandemic losses under their business interruption insurance policy
Insurance fallout: operator Charlie Gilkes (pictured) said Inception Group had experienced a 'huge injustice' after claiming its insurer initially claimed there would be coverage for pandemic losses under their business interruption insurance policy

Related tags: Coronavirus, Insurance, Multi-site pub operators, MA500

A multiple site operator has been “left with no choice” but to press legal action against an insurer after it claimed its insurer backtracked on a pledge to pay out.

Bar and restaurant operator Inception group said it had experienced a “huge injustice” after insurers AXA never paid out for business interruption coverage after an initial claim that this would occur.

In a statement, the operator of 11 central-London sites including Cahoots and Mr Fogg’s, said it had initially notified AXA of its intent to claim for losses on 18 March 2020.

This was days after Prime Minister Boris Johnson instructed the public not to visit pubs and other hospitality venues, as the coronavirus pandemic slowly spread across the country. 

Huge injustice

According to Inception Group, AXA wrote to the operators on 21 April 2020 and said they felt that coverage had been triggered under its business interruption policy.

However, nearly a year later, Inception has not received any compensation and has accused AXA of performing a “complete U-turn” on the issue.

In a statement, the group said: “To our absolute dismay AXA have now performed a complete U-turn and is now trying to claim we are not covered at all.'

“This type of behaviour from a big institution and household names such as AXA is morally and ethically reprehensible.”

The company said it felt it had no other choice but to pursue legal action “as a result of this huge injustice” and called for other businesses under the same insurer to get in touch.

When approached for a comment, insurer AXA said it was "completely untrue" that it had said coverage had been triggered under the group's business interruption insurance policy.

No U-turn

An AXA UK spokesperson explained: “While we understand the challenges many businesses have faced due to the Covid-19 pandemic, we can only authorise claims where the policy wording provides cover.

“The FCA test case has provided clarity around what is and isn’t covered in relation to policy wordings, and it is clear that no cover is provided by the policy wording for this particular claim.

"We are continuing to work with clients and their brokers to ensure all valid claims are paid as quickly as possible.”

"This is no U-turn," they added.

Many operators were left disappointed after assuming they could be eligible for an insurance payout following a landmark court ruling last year.

The Supreme Court ruling on business interruption insurance saw the wording of several policies contested, with the court ruling that insurers had to pay out to pubs affected by the coronavirus lockdown last year.

However, the case brought forward by the Financial Conduct Authority (FCA), only looked at policies with ambiguous wording​, meaning the majority of policyholders have still been denied cover.

Related topics: Property law

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