Hundreds of thousands of businesses may be a step closer to receiving pay-outs from their business insurers, following a recent Court of Appeal test case revolving around the cover afforded under business interruption insurance and their application under the Covid-19 Covid pandemic.
The ruling followed an appeal filed by insurers, Chubb, Allianz, Aviva, Axa, Zurich and others against an initial ruling in favour of the policyholders, the London International Exhibition Centre plc trading as the ExCel Centre in London.
The Court of Appeal decision follows an earlier 2021 Supreme Court decision which had determined that business interruption losses were directly caused by government lockdown actions in response to the Covid-19 pandemic.
The ExCel Centres owners were seeking damages of £16 million for losses, sustained as a consequence of the government lockdown closures and were chosen to be a test case.
Next Steps
It is not anticipated that insurers will seek to appeal to the Supreme Court, as taking into account it’s earlier stance, that court is unlikely now to adopt a contrary view. Policyholders’ similar claims with these insurers are therefore likely to be upheld going forward. There may be a short pause before a flood of claims commence. To that end the owners of Bath Racecourse are involved in similar litigation in a claim due to be heard in January 2025. That will determine the extent to which policyholders are obligated to pass on to their insurers government benefits they received during the lockdowns, such as furlough payments etc.
Once businesses and insurance companies alike obtain clarity from the decisions made in the Racecourse claim in the New Year, it can be anticipated that thousands businesses will re-visit their own pandemic-era losses and formulate claims against their own insurers.
Get in touch with our Litigation and Disputes team led by Head of Department Daniel Crook, If you are a business owner who wishes to consider formulating a similar insurance claim. Our experienced Litigation and Disputes team is on hand to support you through the claim process.
To discuss how we can help, please contact your local Kingsfords office in Ashford, Cranbrook or Hythe. Alternatively, you can send an enquiry and a member of our team will get back to you promptly, by calling us on 01233 665544 or emailing via dbc@kingsfords.net. If you want to see how much initiating such a claim might cost?
We can provide an estimate with no obligation.