The Policy and the Claim
A London restaurant group is proceeding with a professional negligence claim against its insurance broker, James Hallam Limited, after the High Court dismissed the broker's application to have the case thrown out. MW Eat Limited alleges breach of duty and contract regarding the placement of a commercial insurance policy in September 2019. When the first COVID-19 lockdown was implemented in March 2020, the restaurant group held ten locations covered by a total disease and denial-of-access limit of £50,000, with a maximum indemnity period of three months per site. MW Eat claims it incurred over £8 million in uninsured lost profits across three financial years and argues that a competent broker would have secured a broader policy with higher limits and longer indemnity periods.
Court Ruling and Next Steps
The broker sought to dismiss the claim on the grounds that the restaurant group had failed to specify the key terms of a hypothetical alternative policy, such as financial limits, premiums, and named insurers. While the court agreed that the initial claim documents lacked sufficient precision regarding the alternative scenario, it declined to dismiss the case. Instead, the court ordered MW Eat to amend its claim documents within 28 days to outline the missing details of the alternative policy. The litigation will now examine whether the broker was negligent in its placement and how losses across the three financial years map against the alleged alternative cover.