A hotel in Dublin city should be indemnified for business interruption during the pandemic if it proves Covid-19 occurred at its premises in mid-March 2020 on the “balance of probabilities”, the Commercial Court has been told.
Senior counsel Martin Heyden, representing the Marlin Hotel Dublin, said there was no widespread systematic testing during the initial wave of the virus to show Covid physically manifested itself at the hotel at that time.
In such circumstances, the policyholder must be entitled to refer to available statistical information to demonstrate the likelihood of the virus having been present at the premises early on in the pandemic, he said.
With reference to such recognised statistical models, the business should secure an indemnity from its insurer, Allianz, by demonstrating that the virus occurred at the hotel in mid-March 2020 “on the balance of probabilities”, he said.
The Marlin, through its company - Marlin Apartments Limited, is suing Allianz Plc over its refusal to pay out for business interruption during the pandemic.
The 300-room hotel, connected restaurants, co-working space and gym, based on Bow Lane East, St Stephen’s Green, says it suffered a loss of €1.5 million in 2020 when it was expecting a profit of about €5 million as a result of events which are covered by its insurance policies.
Mr Justice Denis McDonald is hearing the first module of the case, concerning whether the Marlin is entitled to an indemnity under two extensions of its policy.
Losses
The first relates to losses incurred due to business disruption or interference as a consequence of “any occurrence” of a notifiable disease at the premises. The second policy extension covers losses for interruption due to damage by an insured defined peril to property.
If the court finds in the Marlin’s favour on either of these points, it will go on to assess the level of loss the hotel suffered due to the denial of an indemnity by Allianz, which has offices on Merrion Road, Dublin.
The Marlin says it suffered loss and damage in each of the policy areas due to an “occurrence” of Covid-19 at its premises that caused restrictions on its use.
Allianz, represented by Paul Gardiner SC and Brian Conroy SC, refused to pay out under the insurance claim, as, it said, no evidence was provided that Government measures restricting the use of the premises were caused by an occurrence of the virus at the premises.
The government restrictions were imposed before there was an alleged occurrence of Covid-19 at the hotel and “accordingly the alleged occurrence self-evidently did not cause the restrictions”, Allianz has alleged.
Opening the case on Tuesday, Mr Heyden, appearing with barrister Martin Canny, noted there was no physical manifestation of Covid-19 at the hotel initially, in the form of a positive test, although there were some identified later during the pandemic.
He submitted that the definition of “occurrence”, as it appears in the Marlin’s insurance policy, is much broader than a “manifestation” of the virus, which is the wording of many other policies. Even if a case of the virus at the hotel was unknown at the time, it still qualifies as an “occurrence”, he said.
On the balance of probabilities there would have been a case of Covid-19 at the hotel in mid-March 2020, and that should be sufficient for an indemnity under the policy, Mr Heyden added.
Allianz has brought a counterclaim seeking various declarations, including that cover will not be triggered unless business was interrupted by Covid-19 occurring at the premises and that being the proximate cause of restrictions imposed on the company.
The hearing, which is expected to last five days, continues before Mr Justice Denis McDonald
