What happened: A London restaurant group is suing its broker for allegedly failing to secure adequate COVID-19 pandemic cover, claiming over £8 million in uninsured losses
Who's involved: MW Eat Limited (restaurant operator), James Hallam Limited (insurance broker), Barbican Protect Limited (insurer)
What's at stake: Up to £8,000,000 in claimed lost profits across three financial years
Why it matters: The ruling sets a procedural marker for how broker negligence claims over pandemic placements must be pleaded - and signals more of these cases are on the way
Where it stands: Broker's bid to have the claim thrown out was dismissed; claimants ordered to amend their claim documents within 28 days
Fifty thousand pounds. That was the total disease and denial-of-access cover sitting across ten London restaurants when the first COVID-19 lockdown hit in March 2020.
The restaurant group behind those sites, MW Eat Limited, says the gap between that £50,000 limit and its actual lockdown losses - over £8 million in lost profits across three financial years - lands squarely on its broker.
MW Eat has taken the claim to the High Court of Justice, alleging professional negligence, breach of duty, and breach of contract against insurance broker James Hallam Limited over the placement of a commercial policy in September 2019. The broker sought to have the claim thrown out before trial.
In September 2019, MW Eat's broker ran a market exercise ahead of renewal. Quotations came back from AXA at £95,000 plus insurance premium tax and Zurich at £90,000 plus IPT. Allianz, NIG, RSA, and Travelers all declined to quote, according to the ruling. MW Eat ultimately renewed with its existing insurer, Barbican Protect Limited, on a one-year policy at a premium of £80,667.09 including IPT.
That policy included business interruption cover and various extensions. But the disease and denial-of-access protections - the cover that would matter most when government-ordered closures shut the hospitality sector - were limited: a £50,000 cap per period of insurance and a maximum indemnity period of three months for each. COVID-19 was not on the specified disease list. Neither was coronavirus nor SARS. None of them had emerged when the policy was placed.
MW Eat says a competent broker would have placed what the formal claim describes as a “correct alternative product” - a policy providing disease cover broad enough to catch pandemic-related closures, with financial limits set per restaurant rather than a single cap across all ten sites, and an indemnity period longer than three months.
The estimated gross profit for the restaurant group over a 24-month indemnity period was £40,000,000. The cover in place for disease and denial of access, across the entire portfolio, was £50,000.
James Hallam asked the court to dismiss the claim entirely, or alternatively to rule in its favour without a trial. The broker's argument was not about the underlying facts. It was about the paperwork.
The broker said MW Eat had never set out the key terms of this hypothetical alternative policy - no financial limit, no indemnity period, no premium, no named insurer, and no explanation of how a policy placed in September 2019 would have responded to losses running through to March 2022. In effect, the broker argued it was being asked to guess the size and shape of the claim it had to defend.
The court agreed the claim documents were not specific enough - but not so deficient that the case should be thrown out.
The ruling found that MW Eat had not pinned down its alternative scenario with enough precision. The broker could not tell what financial limit would have been adequate, what indemnity period the alternative policy would have carried, what premium MW Eat would have been willing to pay, or what portion of the £8 million in losses would actually have been recoverable. MW Eat's losses were framed across three financial years - £1,049,097 in 2019-20, £5,612,641 in 2020-21, and £1,360,790 in 2021-22 - but the claim offered no bridge between those figures and what any realistic policy would have covered.
The court described the claim as “otherwise clear, concise and well organised” and noted MW Eat had taken expert advice that should allow the gaps to be fixed. Rather than killing the case, the court gave MW Eat 28 days to file amended claim documents that spell out the missing details: what the alternative policy's limits and indemnity period would have been, what premium would have been acceptable, and how much of the loss would have been covered.
The court also rejected the broker's argument that the claim could only be run as a lost-chance case - essentially, that MW Eat could only claim it lost the opportunity to buy better cover, not that it would definitely have had cover. That question, the court held, was about evidence at trial, not about whether the claim should be allowed to proceed.
The ruling flagged one further point. Even after the pandemic hit and MW Eat knew the scale of its losses, it bought replacement policies for the following two years with similar disease and denial-of-access limitations. The broker argued this undermined the entire claim - if MW Eat did not buy broader cover once it knew the risk, why would it have bought broader cover before the pandemic? The court acknowledged the point but held it was a question of evidence for trial, not a reason to throw the case out now.
The case now turns on whether MW Eat can sharpen its claim within the 28-day window. For brokers carrying COVID-era professional indemnity exposure, the ruling is a reminder that these claims are still being shaped - and that courts will demand precision in how the “right” policy is described, even as they keep the door open for the claim itself.
