header-logo header-logo

COVID-19: insurer wins ‘disease’ clause dispute

01 May 2024
Issue: 8069 / Categories: Legal News , Insurance / reinsurance
printer mail-detail

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.’

Issue: 8069 / Categories: Legal News , Insurance / reinsurance
printer mail-details

MOVERS & SHAKERS

Charles Russell Speechlys—Gustina Singgih

Charles Russell Speechlys—Gustina Singgih

Corporate team in London welcomes new partner

Church Court Chambers—Maria Karaiskos KC

Church Court Chambers—Maria Karaiskos KC

Historic appointment of chambers' first female head

Wright Hassall—five promotions

Wright Hassall—five promotions

Firm announces five promotions, including new partner

NEWS
The Supreme Court issued a landmark judgment in July that overturned the convictions of Tom Hayes and Carlo Palombo, once poster boys of the Libor and Euribor scandal. In NLJ this week, Neil Swift of Peters & Peters considers what the ruling means for financial law enforcement
Charlie Mercer and Astrid Gillam of Stewarts crunch the numbers on civil fraud claims in the English courts, in this week's NLJ. New data shows civil fraud claims rising steadily since 2014, with the King’s Bench Division overtaking the Commercial Court as the forum of choice for lower-value disputes
Bea Rossetto of the National Pro Bono Centre makes the case for ‘General Practice Pro Bono’—using core legal skills to deliver life-changing support, without the need for niche expertise—in this week's NLJ
Writing in NLJ this week, Victoria Rylatt and Robyn Laye of Anthony Gold Solicitors examine recent international relocation cases where allegations of domestic abuse shaped outcomes
Small law firms want to embrace technology but feel lost in a maze of jargon, costs and compliance fears, writes Aisling O’Connell of the Solicitors Regulation Authority in this week's NLJ
back-to-top-scroll