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A hotel in central Prague is preparing to fight the insurance company Generali Česká pojišťovna which refused to honor its insurance policy.
Renowned real estate developer Jean-François Ott has signed new comprehensive insurance for Smetana Hotel in November 2019, including a separate policy covering business disruptions, which he said in March, when the government closed all hotels to stop the spread of the coronavirus, would be covered by the insurance company. Now Generali claims Covid is not a valid insurance claim.
In addition to refusing to pay the money for the claim, the insurer also terminated the hotel’s six-month contract. Generali offered them a new one for the same price but with less coverage, but only on condition that the terms of the policy, according to the hotel, were removed in the new policy. The dispute is now subject to resolution in court.
Hotel manager Stefan Radstrom said one of the reasons they chose Generali was because he was the only one to accept interruption insurance in the contract, which covers risks not caused by the management of the hotel. ‘hotel. He continued: “From the start, our intention was to protect ourselves from events that interrupt business without doing anything wrong. It is not just a question of catastrophes or terrorist attacks â€, he added.
The management of the hotel turned to a broker to buy them insurance at the end of March. They handed over documents to the insurer on several occasions, until June 12 of this year, when Generali offered the amended contract.
Fourteen days later, on June 25, the insurer ruled that the hotel was not entitled to insurance premiums.
Hotel Smetana is preparing a lawsuit, demanding payment of lost profits up to three million crowns. They are also considering suing the insurance company for allegedly misleading them. Radstrom also accused the insurer of deceptive tactics: “They wanted to manipulate us into signing a contract. Generali never intended to pay the insured to insure these risks.
The lawyer of the hotel Thu Nga Haškovcová continues the refusal, on the basis of two allegations: “The first is the provision on the interruption of activity, where the complaint arises if access to the hotel is prevented. The second is to cover the costs of closing the hotel by decision of the public authority due to an infectious disease or diseases notifiable.
It’s too early in the case to know who will win, but lawyer Tomáš Mácha predicts that Generali could succeed because declaring a state of emergency could fall under insurance waivers. “Unfortunately, Covid-19 is probably an emergency that no one can influence except the government and parliament,†he added. he says.
The insurance company echoed this, saying that at the end of July, representatives of the insurance company told them that the state of emergency was one of the exclusions from the benefits of the insurance company. ‘assurance. They state that a “business interruption†request would only arise if there was material damage to hotel property. This does not include the spread of infectious diseases that started outside the hotel.
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