AXA Must Pay - Restaurant Closure - Covid-19

A Paris court ruled that insurer AXA must pay a restaurant owner two months’ worth of coronavirus-related revenue losses, the restaurateur’s lawyer said on Friday, potentially opening the door to a wave of similar litigation.

The ruling will be watched closely by restaurants, cafes and nightclubs in Britain and the United States which are also threatening legal action against insurers who have not paid out on business interruption policies.

Axa said it would appeal the ruling. It argued there was a difference in interpretation over a specific type of contract signed by a several hundred restaurant businesses with a single brokerage.

The case was brought by Stephane Manigold, who owns four restaurants in Paris. He filed a lawsuit demanding that AXA cover his operating losses after a government order in mid-March to close bars and restaurants to try to slow the spread of the virus.

“This is a collective victory,” he told Reuters after the ruling.

The court said that the administrative decision to close the restaurant qualified for insurance cover as a business interruption loss.

“This means that all companies with the same clause can appeal to their insurers,” Manigold’s lawyer, Anais Sauvagnac, said.

AXA has a 13% market share among French craftsmen and merchants. AXA said it only had 200 contracts in its portfolio with French businesses in various sectors that provide business interruption guarantees when there is no physical damage involved.

AXA said it was in the process of compensating those 200.