Insurance

AXA ordered to pay coronavirus-related BI losses

By Ahmad Zaki

A Paris court has ruled that AXA must pay a restaurant’s coronavirus-related claims, amounting to two months’ worth of revenue losses. This ruling potentially paves the way for similar litigation from other policyholders.

AXA has said that it will appeal the ruling, which will be of interest to other F&B establishments in the UK and US, which are also threatening legal action against insurers for not paying BI claims.

According to a Reuters report, the case was brought by Mr Stephane Manigold, who owns four Paris restaurants. He filed a lawsuit demanding AXA cover his operating losses after a government order in mid-March to close bars and restaurants to slow the spread of the coronavirus.

The court said the administrative decision to close the restaurant qualified for insurance cover as a business interruption loss.

“This means that all companies with the same clause can appeal to their insurers,” Mr Manigold’s lawyer, Anais Sauvagnac, said.

AXA said a small number of its clients in the French hospitality sector were covered for COVID-19-related losses because they bought a special policy. However, most of its clients in the sector did not have that policy and did not quality for compensation.

The industry has estimated that if all COVID-19-related losses were liable for claims, French insurers would have to pay out EUR20bn ($21.8bn) per month.

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