Hotel’s insurance policy triggered by lockdown and Covid ‘at’ its premises, High Court rules

A Dublin city hotel was covered under its €80,000 insurance policy when a nationwide lockdown was imposed around the time the hotel’s manager tested positive for Covid-19, the High Court has ruled.
The Marlin Hotel Dublin’s policy provided cover for business interruption caused by operational restrictions imposed due to a notifiable disease “at” its premises on Bow Lane East, St Stephen’s Green.
The hotel sued Allianz plc over its refusal to pay out under its claim concerning three periods of restrictions across 2020 and stretching into 2021.
It said it had expected the 300-room hotel, connected restaurants, co-working space and gym would make a €5 million profit in 2020 but it instead suffered a loss of €1.5 million.
In a new judgment, the High Court’s Mr Justice Denis McDonald said the Marlin had to firstly prove there was a case of Covid-19 at its premises during any of the three restriction periods for which it was seeking an insurance payout.
He found the Marlin’s insurance policy was triggered on December 23rd, 2020, when the Government imposed a lockdown on all but essential services.
The policy kicked in for this period of restrictions – which continued but with various rule changes until June 2021 – because there was an occurrence of the disease “at” the premises by December 23rd, the judge found.
The hotel manager tested positive for the virus around the time and he had likely been infected by someone else at the hotel, the judge said. The hotel closed to paying guests on Christmas Eve, save for limited permitted exceptions.
The hotel failed to prove its policy was triggered during two other periods of restrictions in 2020 for which it could not show that anyone at the premises tested positive or displayed influenza-like symptoms, Mr Justice McDonald held.
For the restriction period beginning in December 2020, the insurer had argued that hotel manager’s infection was not the cause of the Government’s imposition of a lockdown.
The judge rejected Allianz’s contention that to trigger indemnity the restrictions needed to be a response to Covid-19 cases at the premises rather than to wider disease spread.
The judge said each case of Covid-19 in the country was “equally instrumental” to the decision to impose business restrictions. It could not have been reasonably intended that there would be no insurance cover if the restrictions responded to Covid-19 cases both within and outside the premises, he said.
Mr Justice McDonald’s ruling focused on interpreting the insurance policy. He said he has not yet been tasked with considering whether the Marlin’s claimed losses were caused by the insured peril.
He asked the legal teams to consider whether the remaining issues could be resolved by agreement rather than further litigation.
He will hear from them in court next month.