And it is that, in total, To date, the firm has received slightly less than 600 requests from as many businesses that want to know the options they have to request compensation, which depends on whether your policy includes coverage for loss of profits or stoppage of activity, so you have to analyze it on a case-by-case basis, according to Cayetano Sánchez Butrón. As stated, approximately 60% of the inquiries you receive do include it, although that does not mean that the same percentage of cases will reach the courts, since some affected prefer to wait for new judicial pronouncements –in addition to the one registered in Girona, which opened the door to these claims- before deciding.
At the moment, the combined amount of compensation requested by the cases that have decided to go ahead with the firm now amount to about six million euros, the vast majority coming from businesses of AlicanteAlthough the firm also maintains contacts with associations of the tourism sector in Madrid and they have just contacted them from another organization in Malaga.
The employers of the insurance sector maintain that the legal claims that are formulated will not prosper
Here in the province, the hotel management Hosbec, the Alicante Restaurant Association, the Alicante Merchants Collective or the Unió Gremial are some of the employers’ associations with which the firm already works.
In this sense, the average compensation that is being requested ranges between 15,000 and 20,000 euros, although it depends on the size of the business that claims, according to Cayetano Sánchez Butrón. For example, in the case of hotels, requests of more than 400,000 euros are given.
Rejection of the companies
As expected, the insurers are rejecting the claims for compensation that these clients are presenting to them, which will force them to go to court. The insurance companies argue that such claims are not going to get anywhere, since – they add – the closure due to a pandemic is not included as a contingency in any of the policies. Employers’ Unespa estimates that around 18% of the policies include compensation for losses derived from the closure of the establishment (almost one in five). But, from his point of view, none of them is applicable if the closure is due to an administrative decision or a pandemic.
Thus, they point out that, “in Spain, in general, insurance for loss of profits, in any of its names (business interruption, loss of operation or loss of profits itself), as well as in any of its types of coverage ( gross margin, fixed expenses or daily compensation), requires for its activation the existence of direct material damage covered by the policy. Therefore, business interruption due to authority decisions is not covered in the conditions of the policies ”.
Unespa cites an example: if the closure of a restaurant is the result of a fire and there is fire insurance, in that case the stoppage of the activity would be covered. Based on its interpretation of the Insurance Law, the employer maintains that the stoppage of business activity is only compensable if it has occurred due to events foreseen in the policy and, as the pandemic was impossible to foresee, a closure due to covid should not generate compensation. “There would be no financial capacity in the world to meet this coverage,” they say in the sector.
Cayetano Sánchez Butrón’s responses are also forceful: “The banks said the same with the floor clauses.”
The precedent: a pizzeria in Girona achieved 6,000 euros
It was last February when the Girona Provincial Court opened the spigot for possible claims by agreeing with the Bella Napoli pizzeria, which was claiming compensation of 6,000 euros for the loss of benefits it had suffered during confinement. The ruling is based on the fact that the establishment had included in its policy the coverage for lost profits, a clause that is normally used to compensate the business during the time it takes to be able to open to repair the damage of an accident, such as a fire or a flood. However, the court considered that it should also apply to other cases, such as that derived from the pandemic, and reversed the dismissal judgment that the court of First Instance had initially issued.
Eddie is an Australian news reporter with over 9 years in the industry and has published on Forbes and tech crunch.