Hotel takes case against insurer Zurich over failure to pay for Covid disruption

A hotel in Co Meath has launched High Court proceedings over an alleged failure by insurer Zurich to pay out on a claim for business disruption caused by the Covid-19 pandemic.

The claim has been brought by the Headfort Arms Hotel in Kells. Represented by Richard Kean SC, Darren Lehane SC and Gareth Robinson, the four-star 260-bedroom hotel says it entered into a policy of insurance with Zurich in October, 2019. It claims, under that policy, it is entitled to be indemnified for the disruption its business has suffered, including forced closure, due to the pandemic.

It says Zurich has maintained the policy does not cover the losses sustained arising out of Covid-19, and only operates in the event of damage occurring at the hotel premises.

Mr Kean said the family-run and owned hotel has been doing its best over the last 12 months to deal with the Covid-19 situation in order to keep the brand alive and as many employees in employment as possible.

He said the hotel has found it extremely difficult to survive, and has only been able to remain open with 40 staff thanks to Government support schemes. It believes its problems are not insurmountable, and that it can survive if the insurer pays out on the claim.

In its action the hotel seeks various orders against Zurich, including damages for breach of contract and alleged intentional interference with economic interests, and a declaration it is entitled to the indemnified by the insurer.

Urgency

On Friday Ms Justice Leonie Reynolds granted, on an ex-parte basis, the hotel permission to serve short notice of its proceedings on Zurich.

When the judge remarked that similar claims have been dealt with by the commercial division of the High Court, counsel said there was an urgency about this particular claim.

He said the hotel’s current financial situation was such that it required to take a case before the chancery division of the court in the hope the dispute with Zurich could quickly go to some form of mediation.

The matter will return before the court next week.