NLJ this week: Perils of business interruption policies

Businesses seeking insurance payouts for losses caused by COVID-19 may come up against interesting defences on causation points, barristers say.

Writing in this week’s NLJ, Theo Barclay and Joshua Munro, both of Hailsham Chambers, outline a variety of practical issues for lawyers advising on business interruption claims. For example, a key issue will be ‘whether the proximate cause of loss is the worldwide restrictions caused by COVID-19 or the UK government’s response to it’. If the latter, the value of claims by companies with international supply chains will be reduced because they would have been disrupted in any event.

The 5 March, when the pandemic became a ‘notifiable disease’, will be a significant date for businesses who source products from China―losses occurring before then may be excluded. Lawyers should also note that ‘mitigation of loss is likely to prove one of the most hostile battlegrounds’ in coronavirus litigation.