Claims News

French COVID-19 Restaurant Compensation Ruling Could Leads to Claims Globally

Posted on: May 27th, 2020

Following a Paris court ruling last week that AXA has committed to paying out the majority of business interruption claims from some restaurant owners in France.

The ruling last week said that AXA should pay a restaurant owner two months’ worth of revenue losses caused by the virus pandemic.  The case had been marked as possible precedent for coronavirus-related disputes across the world.

During the case AXA had claimed that the policies it provided did not include cover for business disruption due to a health crisis. The owner of four Paris restaurants, Stephane Manigold, brought the case against the French insurer and claimed that she has been contacted by individuals from the United Kingdom South Africa, Spain and the US asking for details of their case. He referred to the decision in the case as having “global resonance”.

Manigold’s four Paris restaurants include the Michelin-starred Maison Rostang. It had been argued during the case that his policy did not cover the emergency lockdown.  Due to the ruling in 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 losses.

AXA chief executive Thomas Buberl revealed that, despite the company’s appeal of the Paris ruling, they are hoping to devise an amicable solution and planned to meet the bulk of claims from restaurant owners. He said they the contracts some of the restaurants had with AXA may have some ambiguity in them.

He said: “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 additional €500m in aid for small firms, on top their previously shared plans to invest €1.7 billion in domestic French companies. Buberl said in relation to this: “The idea is clearly to reinforce those companies which are weakened by this crisis”.

 

A number of other French insurance companies have revealed that they will pay out business interruption loss claims submitted by some of their policy holders, depending on specific contracts. Generali France, for example, has released a public statement that it will be make payments to 600 hospitality businesses.

There have been no reports of Irish restaurants submitting legal actions in relation to the the COVID-19 pandemic as of yet. Following the ruling in Paris last week it would come as no surprise to see such a step taken.

 

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