Dirty Martini cocktail chain owner files £4m BI legal case against QIC Europe

The Particulars of Claim, dated 4 May, show subsidiaries DC Bars and Tuttons Brasserie are seeking £4.03m from QIC for losses from three shutdowns during the coronavirus pandemic.

QIC was wrong to turn down the claims, the lawyers argued, taking aim at the insurer’s contention that the policy was limited to indemnity for losses suffered during only one three-month period after the first occurrence of Covid-19 within a 25-mile radius. There was no such provision in the policy, the claimants’ lawyers said.

DC Bars operates a chain of six Dirty Martini cocktail bars in London along with outlets in Manchester, Cardiff, Birmingham and Leeds.

Tuttons Brassierie has two operations in London.

The legal document detailed that a commercial combined policy taken out by CG Restaurant with QIC ran from 31 December 2019 to 30 December 2020 and featured BI cover with a sum insured of £25.96m and a 24-month indemnity period.

The claimants listed that the policy wording included an infectious diseases extension with a notifiable radius of 25 miles and maximum indemnity period of three months.

Rejected

According to the Particulars of Claim, after the first lockdown starting on 26 March 2020 the policyholder tried to make a claim with QIC but the insurer rejected it.

The document reported that following the Financial Conduct Authority test case and the Supreme Court ruling QIC paid up and therefore the chain is not seeking more money for this lockdown.

However, it listed three further periods for which the group is seeking payment.

The first is for £551,179 for the ‘autumn interruption’ stretching from 24 September to 4 November 2020.

On 22 September 2020 the government had announced that all businesses selling food or drink (including cafes, bars, pubs and restaurants) must be closed between 10pm and 5am, the filing set out.

Losses

The bar and restaurant owners had tried to claim for BI losses but “wrongfully and in breach of the terms of the policy the defendant has denied that the claimants are entitled to any such indemnity”, the lawyers wrote.

The legal team flagged that QIC had “(incorrectly) asserted” that only one claim could be covered and since one had been met no more Covid-19 related losses should be paid.

The second follow-up claim is for £1,301,572 from 5 November to 15 December 2020.

This covered the second national lockdown – 5 November to 2 December – and the subsequent ‘tier system’ of local restrictions.

“The Tier System interrupted and interfered with the Claimants’ business, including requiring the closure of the First Claimant’s [DC Bars] premises in Birmingham, Manchester and Leeds,” the document recounted.

The lawyers noted that the claim made had been denied by QIC “wrongfully and in breach of the terms of the policy”.

This was done, they stated, “again on the basis that the claimants are allegedly entitled to an indemnity for losses suffered during only one three-month period”.

Interruption

The third and final period encompasses 16 December 2020 to 14 March 2021.

The timeframe, referred to as the ‘winter interruption’, started after the government announced all hospitality businesses must close their doors.

The claims is for £2,177,499.

The claimants suffered “ongoing business interruption losses” but accept their claim is limited to a three-month indemnity period, the filing stated.

It also highlighted that the claimants had tried to make a claim on the policy but been turned down for the same reason as in the other instances.

Estimates

The lawyers concluded that while they had set out their estimates of the claim “the precise amount of the claimants’ losses will be the subject of expert evidence in due course”.

The public court filing system informs that DC Bars and Tuttons Brasserie are being represented by Edwin Coe while QIC is represented by DWF.

The latest court case has followed on from a series of BI insurance legal wranglings.

These began in 2020 with the FCA bringing a High Court case on behalf of policyholders against a cohort of insurers. The judges found in favour of the FCA on the majority of the issues.

After several insurers appealed the Supreme Court handed out its verdict in January 2021 also ruling in the regulator’s favour.

Cases

Hiscox and members of the Hiscox Action Group reached a settlement last June in arbitration proceedings.

Other cases have included Stonegate Pub Company bringing a £845m case against MS Amlin, Liberty Mutual and Zurich as well as restaurant group Corbin & King bringing a case against Axa.

In March Axa opted not be appeal the High Court ruling in the Corbin & King case which ordered the insurer to make multiple payouts under a non-damage denial of access clause. The bill is expected to total £4.4m.

Last month a suite of Premier League football clubs filed a coronavirus BI-related claim in the commercial court against Allianz, Aviva, CNA, Liberty, MS Amlin and Zurich.

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