Insurers’ failed appeals against a “landmark” ruling over a £16 million Covid-19 pandemic-losses claim brought by London’s ExCel centre could allow thousands of other businesses to pursue payouts, lawyers have said.
On Friday, the Court of Appeal rejected a bid by insurance firms to reverse a June 2023 High Court decision over insurance policies and claims for business interruption losses linked to the disease outbreak.
Last year, a judge ruled in favour of policyholders in a number of test cases, including legal action by the owners of ExCel conference centre, as part of years-long litigation over insurance claims linked to the pandemic.
The cases, which included similar claims brought by a hairdresser, gyms, restaurants and nightclub owners, centred on whether “at the premises” clauses in insurance policies covered Covid-19 related closures.
Mr Justice Jacobs concluded that a January 2021 Supreme Court decision in another test case brought by the Financial Conduct Authority over the wording of policies also applied to at the premises cover.
At a hearing in London in June, insurance firms, including Allianz, Aviva and Zurich in the ExCel case, sought to challenge the judge’s ruling.
In a 50-page written ruling, Lord Justice Males, Lord Justice Popplewell and Lady Justice Andrews dismissed all appeals.
The judges said the Supreme Court ruling had focused on insurance cover for disease outbreaks within a specified “radius” of a policyholder’s premises.
The FCA test case saw the UK’s highest court decide what a policyholder had to prove in order to recover losses suffered as a result of closures triggered by the Government’s response to Covid-19.
The judges concluded: “It follows that the Government’s order or advice to close the ExCeL centre was caused by what is agreed to have been an occurrence of Covid-19 at the centre, operating in combination with all other cases of Covid-19 in the country which had occurred.
“The same analysis applies to the other policies.
“On the assumption that there were occurrences of Covid-19 at each of the policyholders’ premises, those occurrences together with all other cases of Covid-19 in the country were a cause of the closure of those premises.
“In ordering the national lockdown, therefore, the Government was responding to the fact of disease having occurred at each of these premises.”
Agreeing with Mr Justice Jacob’s conclusion, they added: “Although there are differences between radius and ‘at the premises’ clauses, those differences do not materially affect the nature of the causal link which must be proved, save that in the case of ‘at the premises’ clauses the occurrence of disease must be at the premises themselves and not within a specified distance from them.”
Aaron Le Marquer, head of policyholder disputes at law firm Stewarts, which represented the ExCel centre, said: “This ruling confirms that thousands of businesses affected by the Covid lockdowns who have not yet had a payout from their insurers may now be able to pursue a claim.
“Many policyholders who were previously denied cover may in fact have significant payments available to them under their insurance policies.”
A spokesperson for Allianz UK said: “We are reviewing the Court of Appeal judgment and considering the implications of the decision.
“We will also be in touch with any customers who are affected by the ‘at the premises’ cases to provide them with an update on their outstanding claims.”
Aviva declined to comment.
