A Dublin hotel’s action over its insurer’s refusal to pay out on a claim for business losses caused by the Covid-19 pandemic has opened before the Commercial Court.
Premier Dale Limited, trading as The Devlin Hotel in Ranelagh, Dublin 6, has sued an insurance broker Arachas Corporate Brokers Ltd and insurer RSA Insurance Ireland DAC.
The hotel operator is part of the Press Up group of hospitality businesses which employs hundreds of people.
On Tuesday, the first module of the case, in which Mr Justice Denis McDonald has been asked to interpret the policy of insurance, opened. The defendants deny the claims against them and the insurer says they are not obliged to pay out on the policy.
Insurance
Opening the case Paul McGarry SC, with Jack Tchrakian, for the hotel, said the action is an important test action for Press Up and other companies that have similar policies with the insurer.
Counsel said their case is, while the policies of insurance are different, very similar to that brought against FBD by four publicans.
Where there are differences, the court should, when it came to the interpretation of the RSA and FBD policies, find those differences favour his clients, he submitted.
The hotel argues the refusal to pay out on the business interruption claim has resulted in the business sustaining “massive and mounting losses” without it being able to access funds from its insurer.
The claim arises from the hotel having to close its doors in March 2020 due to the health emergency caused by the pandemic. The hotel claims it entered into a contract of insurance with RSA in October 2019.
Under that policy, it claims it is entitled to be indemnified in respect of financial losses expected to exceed €1 million arising from interruptions of business at the hotel.
Following the hotel’s temporary closure, the operator sought to be indemnified in respect of its losses but RSA informed the operator in April, 2020 it was refusing to pay out.
That refusal amounts to a breach of the insurer’s obligations under the 2019 contract, it is claimed.
The plaintiff also claims Arachas provided it with advice and other services regarding insurance requirements and that it relied on statements, representations and advices given to it by the broker in relation to the insurance contract entered into with RSA.
Terms
The insurer, represented by Declan Buckley SC and Declan McGrath SC, claims it is not obliged under the terms of the policy to pay out on the business disruption claim.
Under the terms of the policy, there must be an outbreak of a notifiable infectious human disease on the insured premises, which did not occur in this instance, it contends.
Arising out of the refusal to pay out, the hotel operator seeks damages for breach of contract, negligence, and negligent misrepresentation.
It also seeks a declaration it is entitled under the terms of the 2019 insurance contract to be indemnified in respect of the financial losses from interruptions of business since March 15th, 2020.
The case continues on Wednesday.