A Paris court ruling last month resulted in insurance company Axa making the decision that it would paying out most of the business interruption compensation claims from a number restaurant proprietors.
The court ruling stated that Axa should pay a restaurant owner two months’ worth of revenue losses that were incurred due to the COVID-19 pandemic. The case has been seen a a potential precedent for coronavirus-related disputes globally.
Axa informed the Court during the hearing that the policies it provided did not incorporate insurance cover for business disruption due to a health crisis. Axa claimed that the policies that it provided did not cover loss of earning due to the emergency lockdown. The proprietor of four well known Parisian restaurants, Stephane Manigold, brought the case against the insurance giant. He claims that he has been contacted by individuals from the United Kingdom South Africa, Spain and the US asking for specific details of their case. He heralded the decision in the case as having ‘global resonance’.
Due to the Paris Commercial Court, Axa France must make an initial payment of €45,000 to Mr Manigold while a court-appointed expert assesses the extent of his earnings. Axa chief executive Thomas Buberl reacted to the ruling saying that, despite the company’s appeal of the Paris ruling, they are hoping to come up with an agreeable solution and plan to meet the bulk of compensation claims from restaurant owners. He said that the insurance contracts some of the restaurants had with Axa may have some ambiguity in them.
He commented: “These contracts represent less than 10% out of total contracts with restaurant owners and I am confident that we will find a solution. We want to compensate a substantial part of these contracts, we want to do it quickly.”
AXA also revealed that it will be providing an extra €500m in business aid for small firms, along with their previously shared plans to invest €1.7 billion in domestic French firms. Buberl said: “The idea is clearly to reinforce those companies which are weakened by this crisis”.
Some other French insurance companies have also committed to paying out business interruption loss claims filed by some of their policy holders, depending on the terms of their specific contracts. Generali France, for instance, has shared a public statement that it will be make payments to 600 hospitality firms.
There have been no indication, as of yet, that Irish restaurants submitting legal actions linked to the the COVID-19 pandemic.