Axa Insurers Ordered to Compensate a Hotelier- Restaurateur For The First Time

Axa insurers ordered to compensate a hotelier- restaurateur for the first time in a landmark decision that could open the flood-gates to thousands of claims.

A court has ordered Axa insurers to pay an amount of 60,000 euros to a hotelier-restaurateur in the resort of Les Gets, pending the final quantification of its operating losses.

This is an unprecedented landmark decision for an establishment of this type. The Annecy commercial court ordered the insurance company Axa to compensate a hotelier-restaurateur for its operating losses linked to the Covid-19 epidemic.

“This is Axa’s first conviction on the merits on the basis of a contract applicable to all hoteliers-restaurateurs, this contract being distinct from that applicable to restaurateurs”, said Wednesday Me Quentin Mugnier, counsel for this hotelier-restaurateur of the resort of Les Gets (Haute-Savoie). Haute-Savoie is an area in the Auvergne-Rhône-Alpes region of Southeastern France, bordering both Switzerland and Italy.

Initially, the insurer refused any compensation, highlighting a clause in the contract stipulating that the operating loss guarantee does not apply if the business interruption affects several establishments in the same region or at the national level. The judges ruled that this clause should be considered “an exclusion clause”, however, the insurer had not identified it as such.

An exclusion clause must be clearly visible in the contract, with a presentation in very visible characters, as required by the Insurance Code. The court, therefore, ruled this clause null and void and decided that the “operating loss following administrative closure” guarantee was due.

Axa will appeal the judgment

This decision “potentially concerns all hotel and restaurant owners insured by Axa, ie a few thousand contracts on national territory”, underlined Me Mugnier. Axa France has indicated that it wants to “appeal the judgment of the Annecy commercial court”. “It will be up to the Court of Appeal of Chambéry to decide,” said the insurer.

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