Case could prompt a wave of similar claims for Covid-related losses
Thursday 04 Nov 2021 Author: Ian Conway

Food-to-go retailer Greggs (GRG) has filed a £100 million legal claim against Swiss insurance giant Zurich for losses it incurred while its stores were closed during the pandemic.

The company argues it is due the money as compensation for ‘business interruption’ under the terms of its insurance agreement. The claim is significant as if successful it could open the floodgates for other firms to claim against their insurers.

In March, Greggs posted the first loss in its 36-year history after the closure of its shops due to Covid-19. In its results it flagged asset impairment charges and ‘onerous shop operating costs’ as a result of the difficult trading environment and government-enforced restrictions.

Zurich argues its liability is just £2.5 million under the terms of its deal with Greggs, according to papers filed with the commercial court of the High Court in London.

In January, the UK’s Supreme Court dismissed an appeal by a group of insurers including Hiscox (HSX) and upheld the position of the Financial Conduct Authority that insurers should pay up for business interruption costs in most cases.

Earlier this week, Brighton Pier (PIER:AIM) revealed it had received £5 million in business interruption compensation from its insurers, although it said the payments ‘in no way’ covered all of the losses it incurred due to the pandemic.

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