Covid-19 Business Interruption Insurance – High Court finds in favour of policyholders in ‘At the Premises’ Test Case
Following the Covid-19 Business Interruption Insurance FCA Test Case, one of the main contentions that emerged was whether the reasoning of the Supreme Court in the FCA Test Case could be transposed to policy wordings which required disease to be “at the premises” for policy cover to be established. This was discussed in our previous article from 13 December 2021 which sets out the details of this battleground.
On 16 June 2023, Mr Justice Jacobs ruled conclusively in favour of policyholders that policies requiring Covid-19 “at the premises” could provide cover for losses caused by the Covid-19 pandemic. The judgment accords entirely with the arguments that RLK Solicitors have been making on behalf of policyholders since the FCA Test Case was first determined, and therefore fully vindicates the stance taken by this firm.
It was clear to this firm from the outset, as it was to Mr Justice Jacobs, that the Supreme Court in the FCA Test Case had intended for their “concurrent causation” test to be applied to other Covid-19 clauses, such as “at the premises” clauses. Indeed, this decision follows hot on the heels of Corbin & King v AXA, which found that the Supreme Court’s analysis could be applied to “Non-Damage Denial of Access” clauses.
The insurers’ continued unreasonable stance on policy coverage following the FCA Test Case is quickly unravelling, and this firm welcomes the finding of Mr Justice Jacobs which supports the continued efforts of policyholders to continue to put the fight to their insurance companies.
Chris Guy, Head of the Business Interruption Insurance department at RLK Solicitors, has said that “the decision of Mr Justice Jacobs is welcome news. The High Court has got it right on ATP policies and mirrors what we have been arguing for some time. Insurers should limit their losses and pay out on these claims now in order to treat their customers fairly.”
Chris Guy has recently been interviewed and quoted by the Insurance Post in February [SMEs continue to fight for BI payouts as unresolved issues await litigation] and June 2023 [Court opens door to many more Covid BI claims with ‘at-the-premises’ judgment] where ‘at the premises’ policies were discussed. Chris Guy commented on the test cases advising these are “just the tip of the iceberg. It’s the millimetre at the top of what’s to come”.
The judgment also provides some limited guidance on how policyholders are to establish that Covid-19 was at the premises. We are aware that cases of Covid-19 at the premises do not need to be reported or be proven to be Covid-19 by a positive test. However, policyholders will need to investigate the position at their premises as to whether they are able to show that there was likely Covid-19 at the premises.
The insurers have sought permission appeal the High Court’s decision in the ATP Test Cases to the Court of Appeal, which we consider to be the wrong approach to have taken and prolongs the insurers unreasonable handling of such claims. It is such conduct that will open insurers up to claims under section 13A of the Insurance Act, which sets out that the insurer must pay any sums due in respect of the claim within a reasonable time.
We anticipate that there are many policyholders with “at the premises” policies that had given up hope of claiming their losses under their insurance policy. However, the judgment provides a good platform from which policyholders can resurrect their claims.
If you are a business who has suffered losses as a result of the COVID-19 pandemic and had a policy requiring disease “at the premises”, please contact our Business Interruption Insurance team who can assist in making a successful claim against your insurer. Please either call 0121 450 7800 or email us at email@example.com.