The Exhibition Centre London (ExCeL) has won a court case over £16 million of COVID-19 business interruption (BI) insurance claims, which its lawyers say will potentially allow “hundreds of thousands of policyholders” to make the same claim.
Pizza Express and a dozen of other businesses were also the winners in the six test cases, in which businesses sought insurance payment under their “at the premises (ATP)” disease policies for business closures during the COVID-19 pandemic.
In the judgment handed down on Friday, Justice Richard Jacobs said the same logic behind a Supreme Court ruling two years also applies to ATP clauses.
In January 2021, the Supreme Court ruled in favour of the Financial Conduct Authority (FCA) in a test case, which it brought against eight insurers on behalf of small and medium businesses.
In the landmark decision, judges agreed that each case of COVID-19 was “a concurrent cause of the restrictions” on nearby businesses, therefore, “even if there was only one case of COVID-19 in the relevant radius before the restrictions were introduced,” a policyholder should be covered for its losses.
The 2021 case didn’t concern ATP policies.
Insurers have argued the Supreme Court’s analysis of causation shouldn’t be applied to ATP policies because a radius clause is “concerned with things which happen away from the premises and may spread towards them” and that the ATP cause deals with “things which happen at the premises and may spread away from them.”
Jacobs dismissed the argument, saying he finds it difficult to see how a restaurant owner’s illness from COVID-19 should be considered a concurrent cause of the closure of the restaurant next door, but not the closure of his own restaurant.
The judge also dismissed other arguments made for the insurers, saying none of them was persuasive.
Stewarts, the law firm that represented the ExCel Centre, said Friday’s ruling “could potentially affect hundreds of thousands of policyholders.”
“In addition to its close link to the FCA test case, this is also the latest in a string of judgments relating to COVID-19 business interruption insurance disputes and decisions on the application of causation principles to insurance disputes more widely,” the firm said in a statement.
The firm said the judgment provided some “further finality, subject to any appeals, for issues left unresolved by the FCA test case and is therefore a helpful development for the insurance market and businesses across the UK.”
It could “potentially affect hundreds of thousands of policyholders based on previous FCA estimates as to the extent to which ATP cover was purchased,” Stewarts said, urging policyholders who haven’t been able to secure insurance payout for BI losses to revisit their policy documents.
ExCel’s claims were against six insurance companies, including the Royal and Sun Alliance Insurance, Allianze, CNA, Aviva, Zurich, and Chubb. None of the companies immediately responded to The Epoch Times’ request for comment.
ExCel told the Financial Times (FT) on Friday that they were “pleased” the court had confirmed their understanding of the insurance policy.
“And we hope that this ruling will also benefit other policyholders in a similar position,” the statement reads.
Becky Rogers, head of property claims in Allianz commercial business, told FT the insurer needs to consider its position while “working through how it is likely to impact those of [its] policyholders who have outstanding COVID-19 business interruption claims under disease at the premises clauses.”
