Court action against FBD over Covid-19 cover for pubs begins

A case has begun in the Commercial Court today (Tuesday, October 6) against FBD insurance over policies regarding Covid-19 and potential payouts.

The action is being taken by four pubs: Aberken, trading as Sinnotts Bar; Hyper Trust Ltd, trading as The Leopardstown Inn; Inn on Hibernian Way Ltd trading as Lemon & Duke – all in Dublin – and Leinster Overview Concepts Ltd, which trades as Sean’s Bar based in Athlone, Co. Westmeath.

According to RTÉ, senior counsel Michael Cush for the three Dublin bars said 1,100 firms have policies with FBD which are identical to the policies at question in the case.

He said the outcome of the case will be determinate in those 1,100 cases and for individual pubs the case might be the difference between being able to stay in business or not.

Established in the 1960s by farmers for farmers, FBD has become a leading general insurer for agricultural, small business and consumer customers throughout the country.

In 1988, FBD Holdings was floated on the Irish Stock Exchange. Headquartered in Bluebell, Dublin, with 34 branch offices throughout the Republic of Ireland, FBD has a staff of over 900 employees and approximately 500,000 customers.

Legal issues

On point one, Michael Cush told the court that FBD’s view is that there is no cover at all for the bars (who are affected by imposed closures), for two reasons.

First, he said, the insurer claims the cover provided by the policy extends only to local outbreaks of the virus and not to what FBD describes as a ‘national pandemic’.

RTÉ also reports that Cush said FBD argues the imposed closure (of bars) was in response to the national situation and was not therefore following an outbreak of Covid-19 on the premises or within 25 miles.

FBD has previously said it has more than 1,300 pub customers on its books and has received over 700 claims under the business interruption extensions of its business insurance policies.

The insurer has already put aside €30 million to cover potential costs arising from the case; however, it’s understood the bill could rise to as much as €140 million if it loses the legal action.

The case is expected to last up to three weeks.