Pier Operator Gets £1.4M Insurance Payout After Court Ruling

By Martin Croucher
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Law360, London (February 15, 2021, 2:47 PM GMT) -- A hospitality company in one of Britain's most popular seaside destinations said it has received a £1.4 million ($1.9 million) payout from its insurers, after a ruling last month by the U.K. Supreme Court on business interruption insurance during the COVID-19 outbreak.

The Brighton Pier Group PLC said in a market update on Friday that the interim payment from its insurers was welcome. But it added that the hospitality sector needs more financial support from the government if it is to survive.

The payout comes after the Supreme Court found in favor of policyholders in a test case brought by the Financial Conduct Authority on behalf of 370,000 businesses ordered by the government to close during the pandemic. The FCA has urged insurers to pay out quickly on claims following the ruling. 

Brighton Pier Group, which manages the 122-year-old Palace Pier tourist attraction in the south coast city, as well as bars and mini-golf venues across the country, said in November last year that the pandemic had cost it approximately £8.1 million in lost revenue.

The company said on Friday that although the £1.4 million interim payout does "not satisfy the entirety of the group's claims" it was a financial boost to the company.

The group had a business interruption policy sold by broker Marsh under the brand name of "Resilience," which offers cover if a company is forced to close as a result of a disease outbreak either at the premises or within the vicinity.

RSA was the defendant insurer in the test case for the policy wording, although it is also sold by many other insurers in the U.K., including Allianz, AIG, Aviva and AXA. A spokesperson for Brighton Pier Group did not immediately respond to a request for clarification on which insurer had underwritten its policy.

According to government figures last month, the hospitality sector contributes £59.3 billion to the U.K. economy, but has been hit hard by the pandemic, with a 92% fall in economic output in April 2020 compared with February.

Anne Ackord, chief executive of Brighton Pier Group, said on Friday that the government needed to do more to help the sector.

"If businesses in the night-time economy continue to be subject to restrictions after the end of lockdown, the government needs to recognize that further ongoing financial support will be required," she said.

--Editing by Ed Harris.

For a reprint of this article, please contact reprints@law360.com.

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