The Covid-19 pandemic has had a catastrophic impact on businesses across the globe, with many struggling to stay afloat amidst widespread lockdowns and restrictions. According to a report by the World Economic Forum, the global insurance industry may face losses of up to $203 billion due to the pandemic, making it one of the costliest events in history for the sector.
As businesses seek to mitigate these losses, many are turning to their insurance policies for relief. However, as the case of the Marlin Hotel in Dublin demonstrates, obtaining payouts from insurers is not always straightforward.
The Marlin Hotel is currently suing Allianz over the denial of its business interruption insurance claim caused by the Covid-19 pandemic. The hotel argues that it is entitled to indemnity under two policy extensions, which cover losses due to business disruption from a notifiable disease occurrence at the premises, and losses for interruption due to damage by an insured defined peril to property.
Allianz has refused to pay out on the claim, citing a lack of evidence that government measures were caused by the occurrence of the virus at the hotel. This dispute highlights the challenges that businesses face in obtaining insurance payouts for losses caused by the pandemic, and the need for greater clarity and transparency in insurance policies.
Insurance Policy Extensions
The hotel’s claim for indemnity under two policy extensions is at the center of the dispute between Marlin Hotel Dublin and Allianz. The first extension covers losses due to business disruption from a notifiable disease occurrence at the premises, while the second extension covers losses for interruption due to damage by an insured defined peril to the property. Allianz has refused to pay out on the claim, arguing that there is insufficient evidence that government measures were caused by the occurrence of the virus at the hotel, but Marlin claims that loss and damage occurred in each policy area due to the occurrence of Covid-19 at the premises causing restrictions on use.
The senior counsel for Marlin contends that the policyholder is entitled to use statistical information to demonstrate the likelihood of the virus at the premises early on in the pandemic. Furthermore, the definition of ‘occurrence’ in Marlin’s policy is broader than the ‘manifestation’ of the virus in other policies.
Allianz has counterclaimed, seeking various declarations, including the assertion that cover is only triggered if the business is interrupted by Covid-19 occurring at the premises and being the proximate cause of the restrictions imposed on the company.
Coverage Dispute
Regarding the coverage dispute, the focus of the legal action is on the interpretation of the policy extensions and whether the hotel is entitled to indemnity for business interruption losses caused by the Covid-19 pandemic.
The hotel claims that it should be covered under two policy extensions, one covering losses due to business disruption from notifiable disease occurrence at the premises, and the other covering losses for interruption due to damage by insured defined peril to property.
However, Allianz refused to pay out on the claim due to a lack of evidence that government measures were caused by the occurrence of the virus at the hotel.
The crux of the dispute appears to be the definition of ‘occurrence’ in Marlin’s policy, which is broader than the ‘manifestation’ of the virus in other policies.
The hotel’s senior counsel has argued that the policyholder is entitled to use statistical information to demonstrate the likelihood of the virus being present at the premises early on in the pandemic.
Allianz has counterclaimed, seeking various declarations, including that the cover is only triggered if the business is interrupted by Covid-19 occurring at the premises and being the proximate cause of the restrictions imposed on the company.
The outcome of the legal action will depend on the interpretation of the policy extensions and the court’s determination of the causal link between the occurrence of the virus at the premises and the government measures that caused the business interruption losses.
Loss and Damage
Despite being covered by two policy extensions, the indemnity for business interruption losses caused by the Covid-19 pandemic is being disputed by the hotel and the insurer, highlighting the irony of the situation where the very policy meant to provide financial protection in such a scenario is now a source of legal conflict.
The Marlin Hotel Dublin has claimed loss and damage in each policy area due to the occurrence of Covid-19 at its premises, which caused restrictions on its use. However, Allianz has refused to pay out on the claim, citing the lack of evidence that government measures were caused by the occurrence of the virus at the hotel.
The hotel’s senior counsel is arguing that the policyholder is entitled to use statistical information to demonstrate the likelihood of the virus being present at the premises early on in the pandemic. Moreover, Marlin’s policy’s definition of ‘occurrence’ is broader than the ‘manifestation’ of the virus in other policies.
In response, Allianz has counterclaimed, seeking various declarations, including that the cover is only triggered if the business is interrupted by Covid-19 occurring at the premises and being the proximate cause of the restrictions imposed on the company. Therefore, the dispute over the extent of coverage for business interruption losses caused by the pandemic remains unresolved, and the outcome of the legal battle between the hotel and the insurer remains uncertain.
Definition of ‘Occurrence’
Notably, the definition of ‘occurrence’ in the hotel’s policy plays a pivotal role in the ongoing legal battle over coverage for business interruption losses caused by the pandemic. Marlin Hotel Dublin argues that the occurrence of Covid-19 at their premises caused restrictions on the use of their property, leading to losses and damages covered under their policy extensions. However, Allianz refused to pay out on the claim, stating that there was a lack of evidence to support the claim that government measures were caused by the occurrence of the virus at the hotel.
The definition of ‘occurrence’ in Marlin’s policy is broader than the ‘manifestation’ of the virus in other policies, and the hotel’s senior counsel argues that they are entitled to use statistical information to demonstrate the likelihood of the virus at their premises early on in the pandemic. This raises questions about the interpretation of policy language and the role of evidence in determining the occurrence of the virus at a particular location. As the legal battle continues, it remains to be seen how the definition of ‘occurrence’ will ultimately be interpreted by the court and what impact this will have on the outcome of the case.
| Point of Emphasis |
| — | — | — | — | — |
| Definition of ‘occurrence’ in Marlin’s policy | Broader than ‘manifestation’ in other policies | Raises questions about interpretation of policy language | Role of evidence in determining occurrence of virus at a particular location | Impact on outcome of case | | Importance of understanding the definition of ‘occurrence’ in insurance policies |
Counterclaims by Allianz
The ongoing legal battle over coverage for pandemic business interruption losses has taken a new turn with Allianz’s counterclaims seeking various declarations. In particular, Allianz argues that cover is only triggered if business is interrupted by Covid-19 occurring at the premises and being the proximate cause of restrictions imposed on the company.
This counterclaim is significant because it challenges the interpretation of the policy by Marlin Hotel Dublin, which claims to be entitled to indemnity under two policy extensions covering losses due to business disruption from notifiable disease occurrence at premises and interruption due to damage by insured defined peril to property.
The counterclaims by Allianz suggest that the dispute is not only about the interpretation of the policy language, but also about the factual causation of the losses claimed by Marlin Hotel Dublin. Allianz is essentially arguing that the losses were not caused by the occurrence of Covid-19 at the premises, but rather by government measures taken in response to the pandemic.
This argument may have implications for other policyholders seeking coverage for business interruption losses arising from the pandemic, as it raises the question of whether the occurrence of the virus at the premises is a necessary condition for coverage to be triggered.
