Coventry rugby club take legal advice as coronavirus insurance row escalates

Coventry have taken legal advice and launched a petition that has been signed by thousands of businesses in the leisure industry after the Championship club’s insurer refused to pay out when the season ended prematurely.

Income from the club’s stadium, Butts Park Arena, stopped abruptly because of the coronavirus lockdown. That left them with a shortfall of £750,000 and backer Jon Sharp stepped in to keep the club afloat and ensure this month’s wages were paid.

The Midlands outfit fear that their dire circumstances are commonplace outside the rugby union elite, and that some clubs will go to the wall without help and a change in insurers’ policies.

“We would struggle to survive without him [Sharp],” said Coventry’s managing director, Nick Johnston. “We pay £30,000 a year for insurance and were covered by notifiable diseases under the business disruption clause.

“We were turned down because no one employed by us has tested positive for the virus, and the excuse another Championship club was given was that Covid-19 was not listed among the diseases covered. It is new, so how could it be?

“We are one of many businesses throughout the land in this position and we have taken legal counsel,” Johnston added. “The government has been no help and from next month all our staff will be paid under the national job retention scheme.”

“I appreciate that the priority is saving lives but make no mistake, we are talking about the future of rugby clubs.”

Coventry launched their petition at the beginning of last week and were contacted by several businesses in the leisure industry, who said they had experienced similar problems with insurers refusing to pay out. Some have claimed underwriters were trying to insert retrospective clauses concerning the virus.

The ban on social gatherings means no sport is being played in Britain and it may not resume for some months. Clubs and administrations have reacted to a drastic loss of income by cutting wages, prompting some Premiership Rugby players to consider refusing to accept what amounts to a breach of contract.

“I can see where they are coming from,” said Johnston, “but at the same time how many Premiership clubs would be in business without the support of owners?

“This is a very difficult time and no one knows when things will start to get back to normal. We are all trying to do the right thing and make sure we survive this, but there is only so much money to go around.

“The government has been calling on banks to help business. The same needs to apply to the insurance industry.”

Coventry had four home league games remaining in the English second division, including one against the leaders, Newcastle, who were expected to attract a 5,000 sell-out crowd. Butts Park Arena plays host to a number of sports, including cricket in the summer, and is accessed by junior clubs, schools and universities while rooms are used for corporate functions.

“We estimate we will lose £750,000,” said Johnston. “We are covered by insurance and feel harshly treated. Some of our staff showed symptoms of the virus and were told to self-isolate after ringing 111. We are looking to establish whether they did have it to help with our claim because only Sars and Ebola were excluded on the policy.

“I struggle to sleep at night, worrying how to make sure everyone at the club still has a job when this all ends. I am determined to make sure they do.”


Leave a Reply

This website uses cookies. By continuing to use this site, you accept our use of cookies.