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  • Writer's pictureStephan Busch

Hospitality abandoned and cheated by insurances and banks!

The support of hospitality in times of crisis by the state is a disgraceful catastrophe - the behavior of the banks and that of the insurance companies almost borders on fraud. Insurance companies are now facing a wave of lawsuits in Germany, England, France and the USA

The banks decided early on, despite government support with billions, to exclude all aid for hospitality.

“Hospitality hardly creditworthy? / Sparkassen-President: KfW program will not help many companies

(Handelsblatt March 31, 2020).

“The president of the Sparkasse is critical of lending to the hospitality industry. “In the catering, hotel, event management and catering sectors as well as in the travel, transport, logistics, tourism and aviation sectors, many companies make a living from their on-going sales, and the margins are relatively low. Loans under the KfW program could “only be given to companies that are expected to be able to repay the loan within five years.

(Note: he does not see the gastronomy or small family hotels there).

Stefan Bender, Head of Corporate Bank Germany at Deutsche Bank. "And it is also clear that if the customer had massive problems in continuing to do business before the Corona crisis, he might not get a promotional loan."

(Handelsblatt March 31, 2020).

In addition, there is the systematic fraud against customers by the banks:

“Sparkassen und Volksbanken: ARD documentary reveals how customers are ripped off with tricks”

“Entrepreneur Gerhard Stelter from Verden in Lower Saxony had recalculations carried out. In ten years, all three house banks have received one million euros in interest illegal and too much. (and that is only in one company!) (

Systematically ruining commercial small businesses.

The banking experts and professor Hans-Peter Schwintowski estimate that customers suffer damage of several billion euros a year as a result of banks' computer tricks. This is systematically ruining commercial small businesses.”

(02.09.2019 Hallo Niedersachsen) NDR German TV and Radio station

Insured? Most probably you are not!

Now the insurance companies are following suit and do not want to pay any money even

though the customers (the hospitality industry) have paid high premiums for expensive

business closure insurance for decades. A little hope comes from the court that is now dealing with these cases.

“Again, it is the insurance companies to blame. You don't want to pay - or at most only a fraction of the damage caused. Numerous restaurateurs and hoteliers had taken out expensive business closure insurance. "

In Bavaria, several insurers, including Allianz, the Versicherungskammer Bayern (VKB) and the liability insurance company, agreed to pay out 10 to 15 percent of the agreed

daily rates to the restaurateurs concerned. (10 percent instead of 100%?)

But for some restaurateurs this is not enough. They want to go to court - against Allianz, Zurich, Axa & Co. Many lawyers encourage them to do so. A first judgment by the Mannheim Regional Court gives them backing. "Business closures due to Covid-19 rulings are well insured through appropriate policies, the judges explained. Now the insurers are threatened with a wave of lawsuits.

Insurance giant Axa also suffered a setback in France. In the dispute over business closure insurance, a court awarded the operator of four restaurants in Paris compensation for

lost sales for lost sales.

That is why the federal government has put up a protective shield (for the insurance

companies only! - not the cheated client): For this year it is guaranteeing compensation payments by credit insurers of up to 30 billion euros.

(Tagesschau June 12th, 2020)

A judge sets things right

“The refusal of numerous insurance companies to regulate damage through so-called

business closure insurance should not stand up in court. Susanne Laufenberg, presiding

judge at the District Court of Munich I, made this clear at the start of a whole series of


That the closure was not ordered by the "responsible authority", i.e. the health

department, but by the government: - irrelevant -, because the Ministry of Economic

Affairs is also an authority.

The fact that the regulation not only affected a single company, but all of them: "It doesn’t matter to those affected," says Laufenberg. The fact that the innkeepers should initially have defended themselves against the closure, for example by filing a lawsuit before the administrative court: - unreasonable - , because they could not have opened during that time.

The judge also did not accept the argument that most of the companies had no corona cases, but that they were closed as a preventive measure: "It does not say anywhere that the company itself must be affected." The judge even considers the passage in the insurance conditions that the landlord may not receive higher compensation than his actual damage to be - completely ineffective - : "The daily rate is the daily rate. The insurance would not pay more if the damage were higher." According to Susanne Laufenberg, presiding judge at the Munich Regional Court I ”

(July 31, 2020, South German)

So for a few there is at least hope that the banks and insurance companies will not be able to cause even more damage to the population and the middle class. The only sad thing is that we have to be protected from institutions and the state - the ones that were established to serve us.

Author: Stephan Busch, Academic Director at the State University for the Humanities Moscow RGGU, Faculty of Tourism & Hospitality and the Swiss International University earned his Master Certificate in Hospitality Management from Cornell University, USA. He has a diverse experience in launching operations, business development and service training- for hotel and cruise companies in Asia, Europe, Canada and Russia.,

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