COVID-19 | Insurance: compensation of a restaurant owner for operating losses in France

On 22 May, the Paris Commercial Court issued an order that gives hope to many shop owners and craftsmen who were severely affected by the health measures taken by the French Government to contain the COVID-19 pandemic.

In this matter, a restaurant owner had brought a claim before the Commercial Court for compensation of the operating losses caused by the administrative closure imposed on businesses considered as "non-essential".

The Commercial Court Judge, ruling in emergency proceedings ("juge des référé du Tribunal de Commerce"), upheld his claim and ordered the insurer to pay him an advance on the compensation of his business losses amounting to EUR 45,000.00. Please note that the Court also appointed an expert to assess the total amount of his losses.

Comparable administrative measures were taken both in France and in the Principality of Monaco. Would this decision be replicated?

The pathway opened by the Paris Commercial Court order must, however, be analysed with caution for the following reasons:

-    This decision is not final as the insurer AXA has immediately indicated its intention to appeal the decision.

-    The debate on the insurability of the pandemic risk, set aside by the Commercial Court, has not been settled.

-    The French restaurant owner's policy contained a specific "administrative closure" clause and did not exclude pandemics from the risks covered.

At this stage, we can therefore only recommend that the businesses concerned carefully analyse their insurance policy and, if necessary, consult each other to assess the strength of their potential claims.