Aviva PLC (LSE:AV.) is being sued by Butlin’s, the seaside resort company, over a £60 million bill and what defines a “storm”.
A high court claim was filed by Butlin’s over a dispute with Aviva and other insurers over the cover they were meant to provide to the leisure group’s Minehead resort on the Somerset coast.
In September last year, the site was forced to close after suffering damage from heavy rain, before closing between January and March to undergo repairs.
Butlin’s claims the damage, which included flooding, repairs and a loss of sales, resulted in a £60 million cost for the company. Something insurance companies have refused to pay.
Insurers explained the pay-out for damages caused by a “storm” could only reach as much as £25 million, which Butlin’s received.
However, the leisure group believes it is deserving of a higher amount because the Met Office did not declare the weather as a “named storm” and noted that the rainfall had not been accompanied by high wind.
Butlin’s claimed that as “a matter of law, a ‘storm’ occurs only where there is high wind”.
Aviva is responsible for 50% of the risk but has yet to detail its defence or comment on the matter.
Climate change has caused a surge in insurance disputes in recent years and in 2023, researchers recorded the highest number of water damage claims in the UK after £573 million was paid out, according to the Association of British Insurers.