The High Court has ruled in favor of a group of companies, including London venue ExCeL, PizzaExpress and Mayfair nightclub seeking insurance payments for Covid-19 losses, in a closely watched ruling expected to unleash a fresh wave of claims.
The ruling, delivered on Friday, applies to ExCeL – which is seeking £16m in damages against insurers including RSA and Allianz – and dozens of other claimants, in one of the most significant legal battles since the High Court’s victory for policyholders two years ago. . .
In that January ruling, the Supreme Court ruled that companies with policies in place could claim if there was a Covid case near their premises.
Friday’s ruling extends that reasoning to another set of insurance policies with clauses covering companies to close their locations due to Covid occurring “on the premises”.
“This seems to me to be an appropriate conclusion, because any other conclusion would lead to anomalies that would be difficult to logically explain to the policyholder (small or medium-sized business) who has read the policy,” said Mr. Justice Jacobs. .
To say otherwise, he added, would hypothetically lead to a situation where a restaurant owner who caught Covid could not claim his “on the premises” policy, but his next-door neighbor could use that infection to claim their policy requiring infection “nearby.”
“There are likely to be some very large claims coming out of this as well as a lot of smaller claims,” said Aaron LeMarquier, head of policyholder disputes at law firm Stewart, who worked for ExCeL. He predicted the result would lead to hundreds of thousands of additional claims which would “significantly increase the sector’s exposure”.
Insurers’ total losses for Covid-related business interruption claims have risen steadily as courts have found in favor of policyholders over key explanations for their coverage.
After the High Court trial alone, at least £1.7 billion has been paid out in partial or final settlements to companies across the country. The insurers’ initial refusal to pay claims has also been a source of harsh criticism for the sector, and some executives have expressed regret over the incident.
In a statement, ExCeL said it was “pleased that the court confirmed our understanding of the coverage available under the policy, and we hope this ruling will benefit other policyholders in a similar situation.”
Becky Rogers, head of property claims in Allianz UK’s business, said the insurer would need to “look at our position and at the same time work on how this affects our policyholders who have pending claims for business interruption due to COVID-19”. Under Sickness in the Building Clauses.”
RSA declined to comment. Pizza Express declined to comment.