French insurer to challenge court ruling on BI insurance

Albingia, a French insurer specialising in risk management, said it would challenge a court ruling that has ordered it to pay nearly EUR500,000 ($570,000) for losses incurred during the coronavirus lockdown.

According to a report from news agency AFP, a commercial court last Friday ordered Albingia to pay five hotels a provisional EUR450,000 pending a detailed calculation, which the judges commissioned, of their losses over a two-month period.

The court discovered that the hotels’ claims for lost income was indeed covered by the insurance policies they held with Albingia. In a statement given to AFP, Albingia said it disagreed with the court’s interpretation of the insurance contract and contended that the policies do not cover hotel closures ordered by the government.

“We are sensitive to the great difficulties being experienced by the hotel sector, but insurers cannot absorb the consequences of the economic crisis, which is outside of the contractual framework,” said Albingia.

Meanwhile, HHP Hotels boss Stephane Flambert, for his part, said, “Insurers to take into account the daily difficulties experienced by cafe owners, hotels and restaurateurs whose businesses are often their work, their heritage, and sometimes also their home.” Over the last few months, French insurers AXA and Credit Mutuel have been taken to court by restaurant owners in a similar manner.

Last month, AXA was ordered to pay a restaurant's coronavirus-related claims, amounting to two months' worth of revenue losses – a move that was said to potentially pave the way for similar litigation from other policyholders. However, France’s FFA insurers’ federation has said the coronavirus-related losses of clients – which it estimates at about EUR60bn – far exceed the coverage abilities of insurers.

Source: Asia Insurance Review