The High Court has ruled that four pub owners are entitled to be compensated by FBD Insurance for the disruption their businesses suffered due to the Covid-19 pandemic.

In a landmark decision, the outcome of which affects claims made by more than 1,000 Irish pubs and restaurants, the judge found that a policy sold by FBD covered losses the pubs sustained by having to close due to the global health emergency.

The actions were taken by three Dublin bars – Sinnotts, The Leopardstown Inn and Lemon and Duke – as well as Sean’s Bar in Athlone.

Their lawyers claimed that under their insurance policies they were entitled to have their losses caused by the pandemic covered.

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However, FBD argued that the closures were not due to an outbreak of disease at the premises or within 25 miles of them. FBD said the closures happened because of a national situation that was not covered.

The High Court disagreed with this interpretation.

Mr Justice Denis McDonald said cover was not lost where the closure was caused by nationwide outbreaks of disease, provided there was an outbreak within the 25 mile radius and that that outbreak was one of the causes of the closure.

Such outbreaks were a cause of the closure of the pubs announced by the Government on 15 March last year, he said.

The fact that closures outside the 25 mile radius were also causes of the decision did not alter that conclusion.

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More than 1,000 firms have similar policies with FBD and the result will also be of interest to those taking claims against other insurers. FBD set aside €30m to cover any costs arising from the outcome of the case.

The judge ruled the issue of quantifying the losses suffered by the publicans will be dealt with at a later date.

The case will be back before the court on 17 February.

FBD commits to paying claims after today’s court decision

FBD said today’s judgment provides much needed clarity to all concerned.

In a statement, the insurer said it was committed to paying valid claims from Public House insurance policyholders and will endeavour to process claims as quickly as possible and in line with the judgment handed down.

“We understand the significant challenges our Public House Insurance policyholders currently face. FBD will arrange interim payments to affected policyholders while awaiting final clarity on quantum,” the company added.

FBD said it will now consider the effects of the judgment with its reinsurers and will revert to the market in due course on the estimated net cost of Covid-19 related business interruption claims to the company.

“We expect the cost to be well within the range of considered financial outcomes, with FBD remaining strongly capitalised,” the company said.

The insurer also said it believes that the court process was the fairest way to reach a resolution in this matter, adding that it tried to ensure that proceedings were as quick and efficient as possible for all concerned.

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