A court in Spain’s Catalunya region has ordered an insurance company to pay €6,000 in compensation to a restaurant forced to close during the country’s first State of Alarm last year.
The ruling could set a precedent for other insured businesses that had to shut during the coronavirus pandemic, depending on what their policies say or don’t say.
The Girona Provincial Court said that SegurCaixa-Adeslas had to pay the compensation to a pizzeria.
The restaurant owner signed his insurance policy on February 13, 2020, just one month before the State of Alarm was imposed.
His business policy included coverage for the ‘loss of profits’ and the ‘stoppage of activity’ with a daily compensation figure of €200 set for a maximum period of 30 days.
That meant that the total claim amounted to €6,000, which was rejected by the insurer.
The company’s excuse was based on a technicality, namely that the policy did not specify ‘any costs of a stoppage caused by a government reaction to a pandemic’.
The pizzeria owner launched a legal challenge, which he lost in a lower Girona court.
He then appealed the ruling to the Provincial body, which found in his favour.
In his written verdict, Judge Fernando Lacaba said: “The business insurance policy does not specifically mention government action in the wake of a pandemic but the policy holder clearly was unable to trade and suffered a reduced income because of what happened.”
The judge took the view that the insurer did not hold up their end of the contract, especially as there were no were no exclusions clauses regarding pandemic closures.