The Velvet Music Rooms & Sugar Suite club on Broad Street, in the Westside entertainment district of the city, is among the beneficiaries of a Supreme Court ruling which found in favour of small firms receiving payments from business interruption insurance policies.
The Financial Conduct Authority brought the test case on behalf of the policyholders of eight insurance companies including QBE, which Velvet Music Rooms is insured with.
Delighted owner, Dani Hadley, who runs the family-owned bar and club with her sister Eilis Collins, explained that the court ruling meant the business “should receive a six-figure sum”.
Ms Hadley said: “The future is guaranteed now. It’s a real safety net for the business. We can now pay our bills and build up our reserves.”
She said the business interruption insurance has been taken out when the Velvet Music Rooms first opened in 2005.
“When we were forced to close at the start of the first lockdown last March we had a very positive phone call from our broker saying we were really lucky, we were one of the few to be able to get something from our policy,” she added.
“So, we thought we were covered for the loss of business, but then the insurance company decided to put up a fight.”
After losing the first round of the legal fight at the High Court, the test case was fast-tracked to the Supreme Court – the highest court in England.
Ms Hadley said: “There were a lot of us up and down the country hoping the verdict was going to be before Christmas, because hospitality has been absolutely at the bottom of the ladder.
“We’ve been knocked back several times through this process, but that’s now it, there is no other process to go through.”
She said the business had been forced to furlough staff and to take out a Coronavirus Business Interruption Loan to get through the pandemic.
“The only way to get through this was to take on more debt,” she added.
“All through this we have had this insurance policy that wasn’t paying out. It was a real frustration, a real fly in the ointment. We were really wound up by that. It’s what insurance is for.”
The Velvet Music Rooms was able to reopen on July 10 after the first lockdown, but the new tier system meant it closed again on November 4a.