The Supreme Court has rejected an appeal by a Co Meath hotel against the Zurich insurer’s refusal to pay a claim for business disruption due to the Covid-19 pandemic.
The lawsuit was filed by the four-star, 260-bedroom Headfort Arms Hotel, Kells Co Meath, which claimed to have entered into an insurance policy with Zurich in October 2019.
Zurich opposed the measure, saying the hotel’s policy did not cover a claim to disrupt business due to the pandemic.
In his ruling, Judge Dennis MacDonald said he was satisfied that the claim made by the hotel did not fall within the coverage available under the Zurich policy.
The family-owned hotel claimed that under its policy with Zurich, it was entitled to compensation for the disruption to its business, including forced closures, caused by the pandemic.
In the lawsuit, the hotel sought various injunctions against Zurich, including damages for breach of contract, willful interference with economic interests, and a declaration that it was entitled to compensation from the insurance company.
The hotel also requested orders asking the Zurich company to compensate the hotel for the losses it had incurred.
Zurich Insurance Plc disputed the lawsuit and said the policy does not cover losses incurred due to Covid-19 and only works in the event of damage to hotel premises.
It also argued that the hotel did not require coverage under any of the related business interruption extensions introduced by Zurich that specifically provided cover for business interruptions caused by reported illnesses.
Zurich added that at the time the policy was put in place, there were a number of competing policies available in the market that provided cover for business interruptions due to illness.
In his decision, Justice MacDonald said the case brought by the hotel included a tense and unnatural reading of the policy clauses.
The judge added that there was nothing in the relevant factual or legal background to support the explanation given by the hotel regarding the policy.
The judge said that under the terms of the policy he entered into with Zurich, the hotel was not entitled to compensation for temporary deprivation of property.
It has failed to show that its inability to operate its business during the shutdown can be defined as « damage » in the policy.
He added that the hotel could, but did not seek, a policy that explicitly covers business disruption.
Accordingly, the judge said that the only order the court could issue was to dismiss the hotel’s claim.
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