Greggs recorded sales of £811m ($1.1bn) for the 2020 financial year, down from £1.17bn ($1.5bn) in 2019 | Photo credit: Greggs

Greggs has initiated a legal actions against Zurich Insurance PLC, with the UK food-to-go and coffee chain seeking £150m ($180m) over the payment of claims related to business interruption losses suffered during the pandemic. 

Zurich maintains that losses to Greggs' revenues were the result of the emergence of the virus in China and should be considered a single occurrence. 

The Swiss insurance company says it has already fulfilled its obligation to compensate business interruption loss by making a £2.5m ($3m) payment in January 2021. 

Lawyers for Greggs told the High Court that the losses it suffered during the pandemic were the result of differing responses taken by the UK’s four independent administrations – England, Wales, Scotland and Northern Ireland. 

Greggs, which argues that this should not be counted as a single interruption to its operations, was forced to temporarily close more than 2,200 stores during several lockdowns in 2020 and 2021. 

Greggs recorded sales of £811m ($1.1bn) for the 2020 financial year, down from £1.17bn ($1.5bn) in 2019. 

The food-to-go and coffee chain said that its business interruption policy, which is capped at £2.5m ($3m), was triggered each time there was a change to pandemic regulations across the four administrations and should be treated as a new ‘occurrence’. 

"There wasn't a continued interruption of Greggs' business. There were a series of different interruptions caused by the differing government response over time. Each of those differing responses causes differing losses in differing amounts. There was not a single loss, but a series of losses caused by the covered events," said Christopher Hancock QC, counsel for Greggs. 

In September 2020, a landmark judgment from the High Court ruled in favour of the Financial Conduct Authority (FCA) which claimed that insurers should pay out on claims to approximately 370,000 businesses forced to close during the lockdown. Greggs argues that the policy it has with Zurich is similar to those dealt with in the FCA test case. 

The UK's largest pub operator, Stonegate Pub Company Ltd, is also taking a case to the High Court this month on the same grounds, seeking more than £1bn from its three insurers, including Zurich.