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(Article from Insurance Law Alert, February 2021)

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Ireland’s High Court ruled that four pubs were entitled to insurance for business losses incurred during the country’s mandated shutdown. Hyper Trust Limited Trading as the Leopardstown Inn v. FBD Ins. PLC, No. 2020/3656 (Ireland High Court Feb. 5, 2021).

FBD provided insurance to pubs throughout Ireland through more than one thousand different versions of the policy at issue in the present case. The policy included a provision that covered “losses arising from the imposed closure of the premises by order of a government or local authority following the occurrence of a number of specified circumstances including ‘outbreaks of contagious or infectious diseases on the premises or within 25 miles of the same.’” The court ruled that under this provision, the pubs were entitled to indemnification for losses during and beyond the period of mandated closure, rejecting the insurer’s contention that there was no coverage because the closures arose as a consequence of the countrywide presence of COVID-19, rather than a local outbreak at or near the insured premises. In addition, the court rejected a strict “but for” causation standard under which the policyholders would have to prove that their losses were caused solely by the pandemic, rather than from a societal reaction to the virus as well.