Phuket resort can claim insurance payouts for Covid 19 lockdown losses: High Court

1 month ago 641

SINGAPORE - A luxury resort in Phuket can claim insurance payouts for losses arising from Covid 19-related lockdowns after the Singapore High Court ruled that the resort's commercial insurers' policies should cover these losses.

In what is believed to be the first such ruling here on the interpretation of business interruption clauses in the context of the pandemic, Justice Pang Khang Chau found that QBE Insurance (Singapore) and MS First Capital Insurance are liable to indemnify the owner of Le Meridien Phuket Beach Resort for losses after it closed on April 7, 2020 on order of the Thai authorities.

On April 2, 2020, the Governor of Phuket ordered the closure of all hotels on the island because of the rising number of Covid 19 cases. Le Meridien Phuket also had a confirmed case of Covid-19 involving an employee who lived on the hotel's premises from March 24 until he was quarantined in a hospital on March 26 .

The defendants have appealed the ruling.

Le Meridien Phuket is owned by Relax Beach Co Ltd, an entity owned by the family of Singapore businessman Peter Fu, who is also head of investment holding firm Kuo International.

According to Relax Beach, which is represented by Senior Counsel Siraj Omar of Drew & Napier, QBE and MS First Capital had agreed to provide insurance coverage for business interruption losses suffered by its properties including Le Meridien Phuket as a result of certain events set out in the policy. This included the resort's closure as a result of the outbreak of an infectious disease. On April 3, 2020, Relax Beach notified QBE's Thai associate, KWG Insurance, that it intended to make a business interruption claim. It did so on May 26, 2020 but was rejected by the defendants on May 29 on the basis that the business interruption cover required an outbreak of Covid-19 at the hotel. .

Relax Beach sued the insurers in March 2021, alleging, among other things, that the requirements for making its claim had been satisfied as one of its hotel employees was a confirmed Covid case.

It also said it had complied with all of its obligations under the policy, which required the resort's owner to notify the insurers of the closure.

But QBE and MS First Capital disagreed. In court documents, they argued that in order for liability to be triggered under the policy, there must have been an outbreak of the pandemic at the hotel.

They also claimed there was no...

Read Entire Article