[ad_1]
Mark Pring, partner at Reed Smith, delves into the two latest UK judgments in Covid-19 BI cases, and explains how the cases are challenging insurers seeking to unfairly apply the judgments. raises questions about whether this could trigger a wave of conflict.
The flow of coronavirus-related insurance judgments handed down by UK courts appears unabated.
Two recent decisions (one by the Court of Appeal) highlight areas of continuing tension and the different treatment of key words such as ‘occurrence’ and ‘incident’ in different contexts by reference to specific policy language. is emphasized.
various restaurants
in the first instance Various Eateries Trading Limited v Allianz Insurance Plc[2024]Judge Butcher decided in October 2022 that the interpretation and application of the very broad “aggregation” language in the relevant policy is still a balancing act.
At issue (along with disputes over causation and the wording of the “limitation”) was that the amount payable “arises out of, is attributable to, or relates to a single event.” The question was how to account for losses due to business interruption.
Allianz claimed that the coronavirus outbreak in Wuhan, China, or if not its transmission to the UK, may have been created for this purpose. However, the judges considered such a concept too “remote” to justify aggregation even under such broad policy language.
In January 2024, the Court of Appeal ruled in favor of the application of the “remoteness” principle to balance the potential impact of language aggregation in practice. To be clear, while the global outbreak of Covid-19 (or its entry into the UK) may be an ‘event’ in which all claimed losses are added together, justice does not require a distinction between the outbreak and the losses. recognized that a causal relationship is necessary. It’s not that far off. The events Allianz chose were too far away.
Similarly, the court recognized that the balancing act goes both ways.
Various restaurants had argued on a “per establishment” basis that there was no “single event” associated with the loss and therefore it should not be aggregated. Alternatively, to the extent necessary, this language applies separately to each insured location rather than to all business operations.
This was rejected by both courts. Broad aggregation language needs to be given some concrete meaning, ultimately balancing the specific instances of UK government action against Covid-19 being in each case an aggregation event. was justified.
gatwick investment
Nevertheless, it is notable that some insurers are seeking to draw broader lessons from the Court of Appeals’ particular approach to language aggregation. In practice, we have seen examples where insurance companies attempt to directly apply aggregation decisions. various restaurants How language such as “incurrence of loss” should be analyzed when identifying limitations of liability under insurance provisions.
Indeed, the treatment of such limitations in various policies was considered (among other issues) in a recent lengthy decision by Justice Jacobs. Gatwick Investments Limited v Liberty Mutual Insurance[2024].
One of the insurance policies underwritten by Allianz contained a ‘denial of access endangering life or property’ clause (S/30/1).
Any claim resulting from business interruption or interference as a direct result of any action. incident Access to or use of the premises is prevented or impeded by law enforcement authorities, which could endanger life or property within a one-mile radius of the premises. However, this is excluded in any case. occurrence If such prevention or interference with us continues;[e] Less than 4 hours shall be understood as loss resulting from damage to items used by the insured within the premises only in the following cases:
(I) The maximum compensation period is 3 months.
(ii) The insurance company’s responsibility is any claim The total value during the policy period must not exceed £500,000. ”[bolding added]
Significantly, the judge found that the losses suffered on each related property constituted a separate “loss incident,” which is consistent with the analysis of previous important decisions. corbin & king.
Therefore, policyholders were entitled to receive individual coverage limits for each facility, rather than (more narrowly) individual coverage limits for each claimant. “Whether a claim can be made in respect of the closure of each theater depends on the capacity of the relevant claimant.” Prove an “incident” within a one-mile radius of each theater. It is self-evident that a case in which a claim is allowed in Manchester is not the same as a case in which a claim is allowed in Oxford. ”
The judge followed current, relatively well-established case law that, in the case of this type of policy, an “event” must occur at a specific time and in a specific location, and that as a result of the event each facility focused on closing. A certain way. He also weighed in on past case law establishing that facilities can be affected differently by covers that create a “danger” if they are located in different locations.
These and other findings are subject to appeal. In the meantime, the lesson to be taken from these two decisions of his is that, as always, the devil is in the details, and the meaning of words (and how they are applied) depends primarily on context.
[ad_2]
Source link
