Court's insurance ruling 'a triumph', says restaurant chain owner


Paul Milsom, who is delighted at the Supreme Court decision on business interruption insurance payouts - Credit: Milsom Hotels and Restaurants

An East Anglian businessman has expressed his delight after a court ruled in favour of insurance payouts from the first national lockdown.

Paul Milsom - owner of upmarket restaurant, hotel and weddings and events businesses Milsom Hotels and Restaurants and Kesgrave Hall - is one of tens of thousands of businesses now in line for compensation on losses sustained during the first coronavirus lockdown thanks to a Supreme Court decision.

When businesses like Mr Milsom's went to claim for business interruption on their insurance policies, they were given the knock-back. It was before furlough was announced and could have been devastating for his business.

But City watchdog the Financial Conduct Authority (FCA) brought a test case in which eight insurers, including Hiscox, agreed to take part. Hiscox was challenged by thousands of its policyholders as part of the case.

Mr Milsom has a 300-strong workforce across five sites, most of whom had to be furloughed during the three lockdowns.

Although his restaurant and hotel businesses were able to operate when rules eased, that was only for four and a half months since lockdown was first announced back in March.

His weddings, events and private dining businesses have had to remain closed though - with something like 250 to 300 weddings put back as a result. One unfortunate couple have had to rebook four times, he said.

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The insurance payout will only cover the first three months of lockdown, he said, but he was still pleased.

"We are delighted with the verdict of the Supreme Court.  It is a real triumph for the Financial Conduct Authority which moved so quickly and successfully to seek justice for a huge number of small to medium sized enterprises like ourselves," he said. 

"On March 20 last year the government ordered us to close all our premises and the incredible worry and stress of this was tempered by the knowledge that we had Business Interruption Cover which would help sustain us through the difficult weeks and months ahead. 

"A week later we were told by our insurer that they wouldn’t pay, even though it was obviously clear in the policy that they should do. 

"It has made the ensuing period even more difficult especially now we are closed again, this time with no Interruption cover as this was for a maximum period of three months. 

"I therefore call upon all those insurance companies affected by this judgement to expedite these long overdue payments immediately and help play their part in this Covid-19 battle, which hitherto they have shamelessly tried to avoid."

He praised the government and the FCA for bringing the case. Like all hospitality businesses, his had taken a big hit from the crisis, he admitted, but was being supported by a bank loan.

It was too early to say what he would be able to claim, he said.

"The difficulty is that they have refused to discuss the extent of our cover with us so we don’t know, but it will be a very significant sum," he said.