An Italian restaurant in Sunderland has failed in its Court of Appeal battle with a Lloyd’s insurance syndicate over Covid-related losses.
The restaurant, called Bellini, was claiming that syndicate Brit UW Ltd should pay out on a business interruption insurance policy that was in place during the Covid lockdowns.
Brit UW had refused to pay, saying that the policy only covered physical damage to the property and the restaurant should have taken out a non-damage policy.
If the case had gone the other way it could have led to a flood of similar claims because the policy wording Bellini has been challenging is replicated across the industry.
BII has been a hot topic since the first year of the Covid 19 pandemic, when businesses were forced to close and sought to mitigate their loses by claiming on their insurance policies. In many cases they had their claims refused or put on hold due to complicated wording.
This led to fast-tracked litigation brought by regulator the Financial Conduct Authority examining the wording of key BII policies across the insurance industry.
The litigation affected close to 400,000 policy holders and was expedited, via online hearings, to the Supreme Court. In January 2021 the Supreme Court backed many of the arguments brought by policyholders.
While this settled many issues, it did not settle all of them, and cases are still ongoing throughout the courts.
In this case, the business took out a policy that stated: “We shall indemnify you in respect of interruption of or interference with the business caused by damage, as defined in clause 8.1, arising from: a) any human infectious or human contagious disease (excluding [AIDS]) an outbreak of which the local authority has stipulated shall be notified to them manifested by any person whilst in the premises or within a [25] mile radius of it.”
Lawyers for the insurance syndicate argued that it was clear that the damage referred to in the policy was physical damage. Other policies were available that covered non-physical damage.
Lawyers for the restaurant argued that the damage referred to had not been properly defined, and thus it was open to them to interpret the policy as covering non-physical damage too.
They lost the case in the High Court, with the judge pointing out that a sub-clause referred to “physical loss, physical damage and physical destruction”.
Even so, the restaurant appealed. In a ruling handed down today a three-judge panel again dismissed their case.
“It is clear to me that clause [in question] was not, on its face and in its proper context, reading the policy as a whole, intended to provide non-damage cover,” Lord Justice Vos said in the ruling.
Bellini (N/E) Ltd Trading as Bellini v Brit UW Ltd (the Corporate Capital Provider of Lloyd’s Syndicate 2987 for the 2019 Year of Account)
Court of Appeal (Lord Justice Vos, Lord Justice Males, Lord Justice Birss) 30 April 2024
