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Litigation between FBD and three pub owners claiming cover for business interruption scheduled for October

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Litigation between insurer FBD and three pub customers who are claiming cover for business interruption as a consequence of Covid-19 measures has been scheduled for hearing in the Commercial Court in October.

FBD says it is “strongly of the view” that its business insurance policies do not provide cover for a pandemic of the nature of the coronavirus.

To-date the country’s largest domestic insurer has received over 700 claims under the business interruption extensions of its business insurance policies, according to an update today.

The company, which has around 1,300 pub customers, said it wanted to have the issues resolved “as quickly as possible” in order to achieve clarity and minimise costs for all parties.

FBD believes the quickest and most efficient way of achieving that is for proceedings to be brought, by way of test case.

It has now confirmed that ligation between it and three customers claiming cover for business interruption due to measures aimed at minimising the spread of the coronavirus will take place in October.

FBD said it intends using these cases to seek a determination in court of the overall question of whether losses due to Covid-19 related closure, claimed by pub owners, are covered by their FBD policy under the business interruption clause.

“FBD is confident in our interpretation of policy coverage and are of the view that this approach will provide clarity in an expedient manner to the customers concerned,” it said.

At the High Court yesterday several test actions by pub owners over whether their insurance policies with FBD cover the disruption in their trade caused by Covid-19 were admitted to the Commercial Court.

It arose after the insurer refused to provide them with cover since the pandemic resulted in the closure of pubs in mid-March.

The pub owners claim their policies with FBD include a clause that states owners will be indemnified if their premises are closed by order of the local authority or Government if there are "outbreaks of contagious or infectious diseases on the premises or within 25 miles of same".

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