A Sunderland restaurant is unable to use a ‘disease’ clause in its insurance policy to cover business lost during the COVID-19 pandemic, the Court of Appeal has confirmed
The proprietor of Bellini claimed under a clause providing ‘business interruption—cover extensions’, which promised to ‘indemnify you in respect of interruption of or interference with the business caused by damage… arising from… any human infectious or human contagious disease… an outbreak of which the local authority has stipulated shall be notified to them manifested by any person whilst in the premises or within a 25-mile radius’.
Dismissing Bellini’s appeal, however, in Bellini (N/E) Ltd v Brit UW Ltd [2024] EWCA Civ 435, the court upheld the High Court’s earlier ruling that the clause only covered the restaurant for damage. Therefore, the restaurant had no claim.
The restaurant had sought to argue the clause, clause 8.2.6, ‘was an absurdity’ since the word ‘damage’ made no sense. Bellini contended the court could choose to rewrite the policy in the most sensible way in accordance with the obvious intention of the parties, for example, as reading ‘in consequence of the insured perils’.
The insurer countered that such an approach was impermissible, even if it was hard to imagine how liability could arise.
Delivering the main judgment, Sir Geoffrey Vos, Master of the Rolls, said: ‘I do not think that anything has gone wrong with the language of clause 8.2.6, whether obviously or at all… It is all about business interruption losses of various kinds caused by physical damage. It is not and cannot reasonably be interpreted as a non-damage cover of any kind. So far from being absurd, that is just what a fair reading of the policy to a reasonably informed small-business-owning policyholder would lead them to conclude.’
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