Cinema chain ‘hurt’ as Axa refuses to pay £7m insurance claim

The millionaire boss of one of Britain’s largest independent cinema chains has hit out at insurer Axa for its “hurtful” failure to pay out on a claim of up to £7m over losses caused by the coronavirus lockdown.

KC Suri, director of Reel Cinemas, said the French insurer indicated in mid-March that the chain’s “denial of access” cover would pay out for losses caused if a statutory authority ordered screens to close.

Boris Johnson, the Prime Minister, forced venues to shut from March 20, leaving Reel with almost no income and forcing it to furlough 196 of its 235 employees.

Mr Suri said the insurer seems to have now adopted a policy of denying all claims relating to the lockdown.

Reel, which is headquartered in Loughborough, Leics, and has 14 cinemas, is one of thousands of businesses whose claims have been denied by insurers.

Insurance companies say their policies were never designed to cover losses caused by a national lockdown or a global pandemic and that paying out could bankrupt the industry. Hiscox, one of the biggest players, is facing legal action from furious company owners.

Mr Suri said Reel pays a £250,000 annual premium and has insured itself against enforced closure by public authorities since religious groups campaigned for it to be shut 15 years ago when it showed 9 Songs, a sexually explicit film.

The businessman said he fears for smaller businesses which may be less capable than Reel of arguing their case, and pledged to donate part of any payout to help small firms to fight insurers denying claims.

“I’m quite a large client [of Axa’s] and if they’re behaving like this [towards me], what are they doing to small businesses who live hand to mouth?” said Mr Suri.

David Williams, a managing director at Axa Insurance, said: “The denial of access cover applies for actions taken by the police or any other statutory body in response to a danger or disturbance at the premises or within a one-mile radius.

“The national lockdown is not a response to a specific incident at a Reel cinema or its vicinity. It is an attempt to contain the spread of a virus across the country. Unfortunately, no cover applies in this instance.”