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Covid business interruption insurance: Finch confident following high court ruling

The founder of UK wine retailer and bar chain Vagabond, Stephen Finch, is confident that insurance companies who initially refused to pay pandemic business interruption claims will have to pay up following a High Court ruling last month.

Stephen Finch is founder and managing director at Vagabond – a business he began 10 years ago and now comprises eight hybrid wine bars and shops

Finch told db in April that Eaton Gate, which describes itself as an intermediary between brokers and its insurer clients, “had decided to deny all claims” relating to Vagabond’s coronavirus losses, despite a £1.36m business interruption indemnity cover on his policy that was underwritten by Royal Sun Alliance. As a result he instructed lawyers to pursue the matter.

The Financial Conducts Authority, as the regulator of insurance companies, brought a test case on behalf of small and medium size business policyholders in June, in order to resolve the lack of clarity for policyholders. The High Court looked at wording for 21 policies for eight insurance companies, and ruled in favour of the majority of the FCA’s key points, which the FCA said represented a “significant victory” for claimants. Around 370,000 businesses are likely to benefit from the ruling, it estimated.

Finch told db last week that although the issue has not yet been fully resolved – and some of the insurers were appealing to the Supreme Court – “their ruling could not have been more favourable to us, it was a 10/10,” Finch said. He added  he was confident that the High Court’s ruling meant insurers would have to start paying out the indemnity businesses before the appeal is heard in December.

“None of them are appealing that business interruption coverage applies in this case,” he pointed out, noting that only a handful were appealing on the “narrow trends” clause.

“In the meantime, we are pursuing our claims, the High Court and FCA were very clear that nothing waits until the result of the Supreme Court decision – the insurers must engage policy holders in terms of pay-outs right now. So we’re going through that right now.”

Since then, six of the insurance companies originally set to appeal part of the ruling have decided not to do so. As reported by City AM the appeals linked to the Resilience, Eaton Gate Retail, and Eaton Gate Pubs & Restaurants policies have now been dropped, although the insurers will continue to appeal the court’s findings in regard to the Eaton Gate Commercial Combined policies and one other.


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