Flat Iron launches legal action over Covid insurance payout

Flat Iron is the latest restaurant group to launch legal action against its insurer for losses incurred during the pandemic.

According to Insurance Post, the steakhouse chain has issued proceedings against QIC Europe, which was named as the defendant in a similar case brought by restaurant group Wahaca in May.

The site reported Flat Iron has argued it is entitled to claim up to £1m at each of its premises for business interruption and that QIC should have paid out in February 2022, when Corbin & King won its landmark case against insurer Axa.

The ruling found that Corbin & King, now named the Wolseley Hospitality Group, could claim a payout at each of its restaurants for each period of enforced closure during the pandemic.

The case was expected to have consequences for other businesses with the same policy wording.

Hospitality operators have launched multiple legal challenges over the issue since the pandemic, when many insurers refused to pay out to cover losses.

In June, the High Court ruled in favour of a group of businesses, including PizzaExpress and the operator of Michelin-starred restaurant SY23, over the issue.

The judge said operators with policies that covered notifiable diseases occurring ‘at the premises' of their business were entitled to payouts.

Fuller's, which runs almost 400 pubs in London and southern England, confirmed it had started legal action against Liberty Mutual and Aviva earlier this year.

A test case against insurer Hiscox in 2021 saw 72 claimants secure a settlement worth more than £5.2m, while Lake District hotel 1863 Restaurant with Rooms won a six-figure payout from RSA last year.

Flat Iron and QIC Europe have been contacted for comment.