In a 363-page ground-breaking judgment, London International Exhibition Centre v Royal & Sun Alliance Insurance and others [2023] EWHC 1481 (Comm), Mr Justice Jacobs provided clarity on the triggering of policies during the pandemic.
Iryna O’Reilly, partner at Barings, representing six claimants in the case, said: ‘This remarkable triumph, being the second test-case following the Financial Conduct Authority test case in the Supreme Court [FCA v Arch [2021] UKSC 1], sets a precedent that will impact thousands of policyholders and small and medium-sized enterprise owners.
‘Small businesses encounter numerous challenges when pursuing claims against insurers due to the devastating impact of COVID-19. These businesses have either closed down or faced stringent government restrictions, preventing them from fully recovering from the pandemic.’
The insurers argued the Supreme Court’s ruling applied only to radius clauses, which cover events within a specified radius external to the premises, and therefore did not apply to ‘at the premises’ (ATP) clauses, which cover matters arising at the premises themselves.
Finding in favour of the claimants, however, Jacobs J said: ‘Given that the radius can be shrunk from 25 miles, to one mile, to “the vicinity”, without making any difference to the causation analysis, there is no reason why it cannot be further shrunk from the vicinity of the premises to the premises itself.’
Hugh James senior associate Erich Kurtz, representing claimant Why Not Bar, said: ‘The decision emphatically resolves one of the most contentious issues between businesses and their insurers in this field—whether cover exists in principle when the UK government imposed national lockdown where businesses can show COVID-19 occurred or manifested “at their premises”.’
