Update: AXA to Pay Business Interruption Claims to Restaurants After Court Ruling

By and | May 26, 2020

A Paris court ruled last week that AXA should pay a restaurant owner two months of revenue losses caused by the virus pandemic. AXA had argued its policy did not cover business disruption caused by the health crisis.

Stephane Manigold, the owner of four Paris restaurants who brought the case against the French insurer, told Reuters that since the court decision his team had received calls from Britain, South Africa, Spain and the United States asking for details of his contract and the court’s ruling.

“This decision in Paris has a global resonance,” he said.

A UK trade body, the Night Time Industries Association, which is also considering action against insurers, told Reuters the Paris case bodes well for their cause.

“It absolutely strengthens the case for legitimate claims to be considered in the UK, and I am sure that there are some legal parallels being drawn from the case against AXA in France,” the association’s chief executive, Michael Kill, told Reuters.

In Britain, the financial regulator has also turned to the courts to try to gain clarity on whether insurers should pay out coronavirus-related claims to small businesses.

AXA has said it will appeal against the Paris ruling, but Chief Executive Thomas Buberl on Tuesday said that the company was seeking an amicable solution and planned to meet the bulk of claims from restaurant owners whose contracts contained some ambiguity.

“These contracts represent less than 10% out of total contracts with restaurant owners and I am confident that we will find a solution,” Buberl said.

“We want to compensate a substantial part of these contracts; we want to do it quickly.”

Some other French insurers have said they will pay out business interruption losses to some customers, depending on specific contracts. Generali France, for example, has said it will make payments to 600 hospitality businesses.

“I think this decision will reignite the debate,” Emilie Martin, an insurance agent and associate at Dijon-based Spiegel Bletry Martin, said of the Paris court decision.

AXA also said it would provide a further 500 million euros ($546 million) in aid for small companies, on top of plans already announced by French insurers to invest 1.7 billion euros in domestic companies.

“The idea is clearly to reinforce those companies that are weakened by this crisis,” Buberl said.

($1 = 0.9161 euros) (Reporting by Sudip Kar-Gupta and Maya Nikolaeva; additional reporting by Carolyn Cohn in London; editing by Mark Potter and David Goodman)


Topics Legislation Claims AXA XL

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Latest Comments

  • June 4, 2020 at 11:24 am
    Karen says:
    While I don't know anything about French law, I would hope that Tim is correct - that the policy form is important.... Would love to see it.
  • May 28, 2020 at 12:30 pm
    Tim says:
    Or, and here's a possibly really wild concept, they're paying in accordance with the language of the policy. From the companion/prior report on the case: "AXA said a small num... read more
  • May 27, 2020 at 10:57 am
    Vox says:
    French law is Civil Law, which is totally different from our Common Law. Moreover, French law is built around "social responsibility". Their courts can and will do what they... read more

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