The Court of Appeal has upheld London ExCel Centre’s £16,000,000 claim against insurers for losses that it sustained as a result of being forced to close during the pandemic.
ExCel had business interruption cover which included a clause which said that losses would be recoverable if the reason for the Centre’s closure was an outbreak of disease “at the Premises”. After the High Court decided that the losses were recoverable because there had been proximate cases of Covid near to the Centre which necessitated repeated lockdowns, several insurers appealed the decision and argued that cover should not be available under the policy for the following reasons:
- The first lockdown was not ordered in response to the outbreak of Covid at the Centre or near to it but rather because of a small number of proven cases throughout the country;
- The Excel Centre had to close not because of the small number of Covid cases that had occurred at the Centre but because of measures to deal with the nationwide pandemic;
- In order for cover to be engaged, the outbreak at the Centre would need to be known to a public health authority which would then order the Centre’s closure.
The Court of Appeal dismissed the insurers’ arguments. The Government ordered the lockdown in response to all Covid cases and it wasn’t necessary for the Government Medical Officer to specifically order the Centre’s closure in response to an outbreak at the premises to protect the public’s health.
Due to the rapid development of the pandemic and the sheer number of cases there was no need to establish whether the Centre’s closure was referable to particular cases at the premises or in the immediate proximity. In the context of a pandemic, the test for considering whether the policy would be engaged is different to other insured risks and it was unlikely that when the policy was incepted, Excel and the insurers would have contemplated that cover would only be in place if the Centre was closed to deal with an outbreak that had occurred there.
The ExCel decision paves the way for insured parties to make new claims or to request that their insurers review claims that have previously been rejected. If you would like to discuss a potential claim Alex Haddad (ahaddad@nockolds.co.uk; 020 3892 6805) would be happy to discuss how we can help.