Court told FBD never provided cover for pandemics

Insurer FBD does not and has never provided cover for pandemics and no one in Ireland has ever asked for it, the Commercial Court has been told.

In actions with implications for more than 1,000 bars and restaurants, four publicans have sued FBD over its refusal to indemnify them for losses suffered due to the Covid-19 pandemic.

On Wednesday, Declan McGrath SC, for FBD, said part of its defence is that the general insurance market in the State does not insure against events such as pandemics.

Only specialist brokers, based overseas, offer, on a bespoke basis, an insurance policy that covers the fallout from something like Covid-19, he said.

Evidence would also be given nobody has ever asked FBD for a policy that covers against a pandemic such as Covid-19, counsel added.

In his submissions, counsel said the publicans' lawyers have said their claims are similar to those considered by the English High Court earlier this year.

Key issues

That court ruled in favour of the UK's Financial Conduct Authority (FCA), which brought the case on behalf of the policyholders, on the majority of the key issues, counsel said.

In particular, it ruled that payouts were triggered under certain “non-damage” clauses that covered disease and denial of access to business premises.

Counsel said the court was being asked by the publicans to “rubber stamp” the UK decision and a considerable amount of reliance had been put on this case.

The UK decision should not be followed by the Commercial Court, he argued. The UK decision is under appeal and was different in several ways to the claims before the Commercial Court.

The actions have been taken by Dublin bars Aberken, trading as Sinnotts Bar; Hyper Trust Ltd, trading as The Leopardstown Inn and Inn on Hibernian Way Ltd trading as Lemon & Duke.

The fourth action is by Leinster Overview Concepts Ltd, which trades as Sean's Bar, in Athlone, Co Westmeath.

Consequential losses

They claim that under their policies of insurance taken out with FBD they are entitled to have their consequential losses covered by what they claim is an insurable risk.

They also claim that the insurer is in breach of contract.

The publicans claim the insurance policies taken out with FBD have a clause that states the pub owners will be indemnified if their premises are closed by order of the local or Government authority if there are “outbreaks of contagious or infectious diseases on the premises or within 25 miles of same”.

That interpretation of the clause is disputed by FBD, which in April informed the pub owners that a pandemic does not fall within the scope of the clause.

FBD says the closures did not occur as a result of an outbreak of disease at the premises or areas where the pubs are located.

Also on Wednesday, Mr McGrath raised FBD’s concerns about media reports which he said referred to detailed matters contained in documents discovered during the pretrial process.

Counsel said the court had received the materials, which were not to be considered opened before the court, and therefore should not have been placed in the public domain.

FBD, counsel said, is concerned this was possibly in breach of an implied undertaking.

Reasonable explanation

While there could be a reasonable explanation as to what had occurred, his side wanted to know who provided the media with the material.

Mr Justice Denis McDonald said it was a very serious matter if the implied undertaking given has been breached in any way, and while he was not looking at any party, the matter needed to be investigated.

Michael Cush SC, for three of the publicans, said the matter was being taken very seriously, and his side would try to resolve the issue with FBD’s lawyers.

A letter from his clients had been sent to FBD’s lawyers in response to the concerns, the court heard.

The parties agreed to liaise with each other over the matter, and the judge hoped that this particular issue concerning the undertaking would be dealt with as soon as possible.

The hearing continues.