Brewery Sues RSA For £1.7M COVID-19 Lockdown Payout

By Najiyya Budaly
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Law360, London (November 23, 2020, 4:15 PM GMT) -- A brewery has sued Royal & Sun Alliance Insurance PLC seeking £1.7 million ($2.3 million) in compensation under its business interruption policy after the insurer agreed to cough up only £100,000 for the closure of the company's pubs during the COVID-19 pandemic.

Camerons Brewery, an independent brewer based in the northeastern port town of Hartlepool, sued RSA in the High Court for a £1.7 million indemnity payout. The company is seeking damages for breach of contract as an alternative.

The brewery, which owns 37 public houses and bars, said in a Nov. 17 claim that it is owed the money under business interruption coverage that it took out with the insurer in November 2019. The policy included an extension that covered the brewery if its pubs and bars were forced to be shut by the government as a result of infectious disease.

Camerons said that the extension covered it for a maximum indemnity period of three months and limited the payout to £100,000 per loss. This means that RSA was due to hand over the amount for each venue that was shut when the U.K. went into a national lockdown on March 20, the brewery alleges.

But the insurer has claimed that its liability is capped at £100,000 in total, the brewery said in its particulars of claim.

"The defendant has asserted, incorrectly, that the policy would only respond up to a limit of £100,000 in aggregate in respect of all the insured locations," Camerons said in its filing. "There is a separate limit in respect of each loss for each closure (or part-closure) at each insured location."

The brewery said that it told the insurer of the claim in March and made the claim under the policy on April 5.

"In breach of the terms of the policy, the defendant has refused to confirm cover or provide an indemnity," according to the particulars of claim.

Camerons said that it closed Bar Soba, in Edinburgh, on March 9 after seven of its bar staff began showing symptoms of COVID-19. It closed the rest of its locations on March 20 in compliance with Prime Minister Boris Johnson's statement, it said.

When the government eased restrictions in July, two of its locations remained closed because of their size and layout, Camerons said. Four of its pubs and bars were closed in September after members of staff showed symptoms of the virus and a further six were closed during regional lockdowns in October.

The suit comes as the U.K. Supreme Court is currently weighing whether an estimated 370,000 companies can claim on their insurance for the U.K.'s first lockdown in a high-profile case brought by the Financial Conduct Authority.

The test case will have wide implications not only for the companies seeking to claim under their business interruption policies for the pandemic, but also for principles of causation and trends clauses in future cases.

RSA and representatives for Camerons did not immediately respond to requests for comment Monday.

Camerons Brewery is represented by Wynterhill LLP.

Representative information for RSA was not available Monday.

The case is Camerons Brewery Ltd. v. Royal & Sun Alliance Insurance PLC, case number CL-2020-000671, in the High Court of Justice of England and Wales.

--Additional reporting by Martin Croucher. Editing by Alyssa Miller.

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