Youghal Hotel Insurance Policy ‘Riddled with Confusion’ Expected to Cover Pandemic


An insurer’s business interruption insurance policy is “riddled with obscurity and confusion” and should be interpreted as providing coverage in the event of a Covid-19 disruption, the commercial court heard.

The claim was brought by Richard Kean SC, for a Cork hotel suing a Slovenia-based insurer and broker, on the first day of a case which the lawyer says has implications for several other similar companies that have been closed by the pandemic.

Coachhouse Catering Ltd, which operates the Old Imperial Hotel in Youghal, County Cork, has taken action against what it says is the refusal of insurance company Zavarovalnica Sava to provide compensation for losses suffered in as part of a business interruption insurance policy it has provided. He is also suing Irish broker Frost Insurance, operating as Frost Underwriting UQuote.

Coachhouse is asking for statements including that it is entitled to compensation under the policy for interruption / loss after March 15 of last year when the first foreclosure was announced.

It also requests a declaration that the order to close from that date constituted loss and / or destruction and / or damage to the property it uses for business purposes. She also seeks damages for breach of contract, including aggravated and / or exemplary damages.

The defendants reject the allegations.

Opening the case, Mr Kean said Zavarovalnica Sava, an insurer and reinsurer who made a net profit of € 47.6 million last year, pledges on its website to “never leave you alone” and that he was caring and professional.

The lawyer said:

He also says it gives you peace of mind, but the complainants didn’t have the peace of mind, they almost lost their minds.

The heart of the Coachhouse case is that the hotel closure caused losses and the insurance policy was riddled with ambiguity, he said. The defendants themselves did not know what the policy was and, as a policy riddled with obscurity and confusion, it should be interpreted in favor of its client, the lawyer said.

Peter Mills, an insurance expert called on behalf of Coachhouse, told the court that under the general exclusions section of the policy in this case he was not specifically excluding the risk of a pandemic “the presence of which would have rendered this litigation without object “.

Alan Grace, a retired insurance expert on behalf of the defendants, on cross-examination, said before Covid that pandemics like SARS and swine flu were “on the horizon” and some insurers chose to include them while that others have sought to reduce their coverage. In general, however, they did not put pandemic exclusions in the policy.

Asked by Mr Kean where Covid was specifically excluded in Coachhouse policy, Mr Grace said it was not in politics. He said the policy was not very well constructed and written.

The case continues before Judge Denis McDonald. It is heard as both physical and remote hearing thanks to the specially designed TrialView system.

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