AXA settles French restaurants' COVID claims with $365M payout
The proposed offer arrives more than a year after AXA lost a COVID coverage suit filed by a Parisian restauranteur.
AXA has agreed to pay 300 million euros (approx. $365 million) to settle 15,000 claims from French restaurant owners who were forced to shut down their businesses during the coronavirus pandemic in 2020.
In a June 10 press release, the Paris-based insurer said the proposed settlement would apply to restaurant owners holding a “standard policy” with extended coverage for business interruption losses linked to administrative closure. Further, AXA said the payout is intended to cover about 15% of catering activity turnover (excluding delivery, take-out and online sales) experienced by the policyholders during lockdowns last year.
“AXA has played its role and acted in a responsible manner during the pandemic, supporting hundreds of thousands of customers and making a significant contribution to the financing of the economic recovery,” said AXA France CEO Patrick Cohen in a statement. “We regret the misunderstandings with some of our restaurant clients, especially given this sector was particularly hard hit during the sanitary crisis.”
Although the settlement is substantial, AXA expects the net cost of the offer to be offset by positive COVID-related developments thus far in 2021 in France and Europe, according to Moody’s, which also declared a stable outlook for AXA and its entities through the year.
AXA’s proposal arrives more than one year after it lost a court battle against Parisian restauranteur Stephane Manigold in May 2020. Manigold filed the lawsuit to force AXA to cover two months’ worth of revenue losses his businesses suffered due to government-mandated closures. At the time of the court ruling, AXA CEO Thomas Buberl said that the company planned to meet the bulk of claims from restaurant owners whose contracts contained some ambiguity, which represented less than 10% of the insurer’s restaurant contracts.
In the U.S., nearly 1,700 lawsuits have been filed by businesses against insurers over the denial of COVID-19-linked claims, with 120 cases currently on appeal in state and federal courts, according to the University of Pennsylvania Carey Law School’s COVID Coverage Litigation Tracker.
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