Britain's biggest pubs group, Stonegate, which is suing Zurich Insurance ZURN.S and two peers for "1 billion pounds over lockdown losses, battled the COVID-19 pandemic "day by day, venue by venue", a London trial heard on Monday 13 June.
Ben Lynch, a lawyer for Stonegate, said the company's 760 insured pubs, bars and night clubs at the centre of the case had each faced separate challenges, opening and shutting at differing times according to regional rules - and seeing business drop by up to 90% below projections.
If successful, the Stonegate case could give fresh momentum to a second wave of claims against insurers that might cost the industry billions of pounds, further damage reputations and push premiums even higher for businesses and consumers, experts say.
Stonegate is suing MS Amlin MITSID.UL, Zurich Insurance, and Liberty Mutual LBRTML.UL, alleging the pandemic, government-ordered closures and restrictions triggered business interruption cover multiple times and that the interruption and interference will continue until April 2023.
Insurers accept Stonegate's businesses were covered by their policies, but contend that cover was limited to one business interruption payment of £2.5 million, which has been paid, court documents show.
In total the insurers have paid £14.5 million, including 12 million for additional increased costs of working (AICW), and say their liability is limited to £17.5 million. They label the claim "hugely overstated", filings show.
MS Amlin led the Stonegate policy with 55% of exposure. Both other insurers have 22.5% each.
The case is by far the largest since the Supreme Court ruled last year that many insurers had wrongly rejected business interruption claims from thousands of small businesses that had to close or restrict trading to curb the coronavirus.
Policyholders have so far received nearly £1.35 billion in compensation. But not all policy wordings were covered and, where they were, some dispute payout levels.
Other insurers are following the Stonegate case closely. Asked if their employer was among those being sued, a representative from one insurer watching proceedings told Reuters: "No, not yet."
Insurers have been on notice since Corbin & King, the owner of London's Wolseley restaurant, won a similar BI case against insurer Axa AXAF.PA in February - although it has since gone into administration after a battle with its biggest shareholder.
Multi-Million Pound Claims
Multi-million pound claims by sandwich-to-pasty chain Greggs GRG.L against Zurich and Strada and Coppa Club owner Various Eateries VAREV.L against Allianz ALVG.DE will be heard next month.