Thai hotel wins court case against QBE, MS First Capital over COVID payout

Ruling found the case to be covered under business interruption

Thai hotel wins court case against QBE, MS First Capital over COVID payout

Insurance News

By Kenneth Araullo

A Phuket hotel, whose operations were disrupted due to the COVID-19 pandemic, has secured a victory in a Singapore court case, compelling two insurers to provide payouts for the losses incurred by the resort.

A CNA report revealed that Justice Pang Khang Chau ruled in favour of the Relax Beach company, which suffered business interruption at its insured property in Thailand, the Le Meridien Phuket Beach Resort. The insurers involved in this case are QBE Insurance (Singapore) and MS First Capital Insurance.

Le Meridien Phuket has been covered under two insurance policies since 2016. The first is a local policy issued by King Wai Insurance (KWG), a Thai associate of QBE Insurance (Singapore). The second is a master policy jointly issued by QBE Insurance (Singapore) and MS First Capital Insurance in Singapore.

The hotel's insurance provided coverage for any partial or complete closure of its premises as ordered by a public authority, due to an outbreak of a human infectious or contagious disease at its location. In response to a series of measures taken by the Thai government and the local Phuket provincial government in 2020, including the Phuket governor's order to close all hotels from April 4, 2020, the hotel informed KWG of its intent to file a business interruption claim on April 3, 2020.

KWG subsequently informed the hotel on May 25, 2020, that there was no business interruption coverage under the local policy and advised making the claim against the master policy. When the hotel filed for it, the claim was subsequently rejected on the grounds that the business interruption coverage required an outbreak of infectious diseases at the hotel.

It was subsequently found that one of the hotel’s employees did develop COVID symptoms on March 24, 2020.

The court ordered the two insurers to indemnify Le Meridien Phuket Beach Resort for the loss resulting directly from the interruption or interference with its business, stemming from the closure ordered by the Phuket governor. The presiding judge also awarded costs in favour of the hotel, amounting to SG$20,000.

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