SINGAPORE: A Phuket hotel whose operations were interrupted by the COVID-19 outbreak has won a Singapore court case to get two insurers to grant payouts for losses incurred by the resort.

In an oral judgment released on Monday (Oct 23), Justice Pang Khang Chau ruled in favour of the Relax Beach entity, for the business interruption it suffered for its insured hotel in Thailand, the Le Meridien Phuket Beach Resort.

The insurers involved are QBE Insurance (Singapore) and MS First Capital Insurance.

Since 2016, Le Meridien Phuket has been insured under two policies. The first is a local policy issued by King Wai Insurance (KWG), a Thai associate of QBE Insurance (Singapore).

The second is a master policy issued by both QBE Insurance (Singapore) and MS First Capital Insurance in Singapore.

The hotel was insured against any partial or whole closure of its premises by the order of a public authority, as a result of an outbreak of a human infectious or contagious diseases at its premises.

The Thai government and the local Phuket provincial government implemented a series of measures in 2020 because of increasing COVID-19 cases. These culminated in an order by the Phuket governor on Apr 2, 2020, closing all hotels with effect from Apr 4, 2020.

On Apr 3, 2020, the hotel notified KWG that it intended to make a business interruption claim.

On May 25, 2020, KWG told the hotel there was no business interruption cover under the local policy, and that the claim should be made against the master policy.

The hotel then did so the next day.

That same day, QBE Insurance (Singapore) responded to ask whether there had been any outbreak of COVID-19 at the hotel.

The hotel’s insurance broker responded in the negative the next day, and the claim was rejected on the basis that the business interruption cover required an outbreak of infectious diseases at the hotel.

In fact, one of the hotel’s employees had developed COVID-19 symptoms on Mar 24, 2020, and was hospitalised from Mar 26, 2020 to Apr 1, 2020.

Justice Pang said it was “more likely than not” that the hotel employee’s diagnosis and hospitalisation formed part of the statistics informing the deliberation of Phuket’s Committee of Communicable Disease, and the decision of the Phuket governor.

He ordered that the two insurers were liable to indemnify Le Meridien Phuket Beach Resort for loss resulting directly from the interruption of or interference with its business, as a consequence of the closure ordered by the Phuket governor.

The quantum of the indemnity shall be determined in accordance with the mechanisms provided in the relevant insurance policy.

He awarded costs in favour of the hotel, fixed at S$20,000.