Melbourne pub empire launches massive COVID insurance claim

The Melbourne pub empire that owns nine pubs including the iconic Esplanade Hotel, has launched a $26 million insurance claim after being forced to shut down during numerous COVID-19 lockdowns.

The group of nine pubs has engaged a law firm to process the claim against four major insurers.

In May, Matt Mullins, owner of The Espy in St Kilda revealed in The Australian that  his workforce had decreased by two thirds in comparison to pre pandemic levels and the hotel’s gross profits had suffered a $8.7 million hit due to all the lockdowns.

The case was filed by Law firm Gadens against insurers Arch Underwriting at Lloyds, AXA XL, Chubb Insurance, and Berkshire Hathaway Specialty Insurance.

The claim seeks to recover losses from the first lockdown only and will provide insight to other businesses who have suffered similar issues, where they have been refused claims for business interruption insurance.

According to the pub group, between 4pm 30 June 2019 and 4pm 30 June 2020, it was provided with a policy which gave coverage in the event of an “order of a competent public authority consequent upon the outbreak of a notifiable human infectious or contagious disease occurring within 40 kilometres of the Premises”.

Gadens has filed more than 20 separate cases for other Melbourne businesses in recent weeks, but this one is the largest claim yet.

Gadens lawyer Simon Theodore stated that the group had settled on the $26 million figure based on the shortfall in profit in the pre pandemic period, minus any costs saved from being shut.

Irit Jackson, 23rd June 2021