AXA seeks to settle 1,700 BI claims with restaurants as lawsuits continue

AXA CEO Thomas Buberl has told Le Monde newspaper that the insurer has identified 1,700 of its contracts with restaurant owners in France in which the terms are not clear about whether Covid-19-related losses are covered by business interruption (BI) insurance. Mr Buberl said discussions are underway with the restaurants that hold the ambiguous policies, and agreements have already been reached with 200 that will cover a substantial portion of their losses. AXA has set aside some €1.5bn for this year to cover virus-related claims, including BI losses. Last month, a Paris commercial court ruled the insurer should pay a restaurant owner two months of lost revenue caused by the virus pandemic and ensuing lockdowns. In this case, AXA argued its policy did not cover BI losses caused by the pandemic, but the court ruled otherwise. During the interview with Le Monde, Mr Buberl stressed that the number of ambiguous policies is relatively small compared to AXA’s overall book of business. “We have 20,000 contracts with restaurants, the vast majority of which do not cover operating losses in the event of pandemic,” he reportedly said. “There is some debate only for 1,700 of them because they are not clear. From the start, I’ve asked our teams to focus on these contracts and we started talks with the restaurants concerned,” he added. AXA will be keen to settle these disputed claims as quickly as possible to calm analysts and investors over the potential scale of its Covid-19 bill. It will also be keen to limit the potential reputational damage with its wider customer base as it battles with struggling small business owners during this difficult period. On Wednesday, Barron’s newspaper reported, for example, that the owners of a small restaurant in France's Beaujolais wine region have sued the insurer for refusing to cover losses they suffered during more than two months of enforced coronavirus lockdown. David Genillon and Valerie Nassi accuse AXA of failing to honour their €17,000 claim. The restaurant owners held a professional multi-risk policy with AXA that covers them for losses due to “administrative closure... as a result of contagious disease, murder, suicide, epidemic or poisoning”. Barron’s reported that AXA rejected the claim, citing an exclusion clause that specified any “epidemic” had to be limited to the insured restaurant, and not a generalised shutdown. “This is an abusive clause, a contractual trick,” the couple's lawyer Jean-Jacques Rinck told journalists at the commercial court of Lyon, reported Barron’s. “AXA knew the company would not pay out by drafting this exclusionary clause. This can be considered a scam,” he added. Mr Rinck said there were about 50 other similar cases. “We hope that the decision (of the commercial court) of Lyon will create a legal precedent,” he added. AXA’s lawyer Pascal Ormen said the clause was “perfectly valid” and asked the judges to dismiss the case. “When several establishments are affected (by an epidemic), it is a collective closure, and Axa cannot cover the operating losses,” he reportedly argued. The plaintiffs sought an urgent ruling from the court, which has been set for 10 June. Cafes, bars and restaurants were allowed to reopen their doors in France on Tuesday. However, in the Paris region that is still considered at high risk of ongoing coronavirus spread, eating and drinking establishments can host clients exclusively at outside tables.

AXA seeks to settle 1,700 BI claims with restaurants as lawsuits continue

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