LITIGATION
Update: London ExCel Centre Prevails in Appeal Over COVID-19 Business Interruption Claim
LONDON //BestWire// - (Updates with Allianz comment in sixth paragraph.) A court sided with the owners of London's ExCeL Centre in an appeal brought by insurers concerning pandemic-related business interruption coverage in a case that could affect business owners who suffered financial losses in the outbreak.
The London International Exhibition Centre plc, an exhibition and venue space known as ExCeL, sought £16 million ($20.9 million) in a test case concerning at "at the premises" clauses in various insurance policies and whether the closure of businesses was covered. ExCeL prevailed in 2023.
Allianz Insurance plc, along with insurers Aviva Insurance Ltd., Zurich Insurance Co. Ltd., and Chubb European Group SE, filed an appeal of that decision, which was dismissed Sept. 6 by the Court of Appeal in London.
Stewarts, the law firm that represented ExCeL Centre owners, said the decision consolidated policyholders' success in establishing coverage. In 2021, a Supreme Court decision in a case brought by the U.K. Financial Conduct Authority found each and every occurrence of COVID-19 in the United Kingdom was a concurrent proximate cause of government action and therefore a business interruption loss, the firm said.
"As it stands, the Court of Appeal’s decision represents a resounding endorsement and independent application of the Supreme Court’s concurrent causation reasoning first set out in 2021 in FCA v Arch, and demonstrates that the court will be reluctant to disapply or row back from those principles," the firm said in a statement.
An Allianz spokesperson said the company is reviewing the judgment and considering its implications. "We will also be in touch with any customers who are affected by the 'at the premises' cases to provide them an update on their outstanding claims," the spokesperson said.
Aviva declined to comment on the decision. Zurich and Chubb did not immediately respond to requests for comment.
The London International Exhibition Centre had won its COVID-19 business interruption test case, a judgment that could affect hundreds of thousands of business owners who suffered financial losses during the early stages of the pandemic (BestWire, June 16, 2023).
The test case concerned “at the premises” clauses in various insurance policies and whether the closure of businesses was covered.
Judge Richard Jacobs in the U.K. Commercial Court issued the ruling that the U.K. Supreme Court’s 2021 decision on disease clauses in insurance policies, a suit brought by the U.K. Financial Conduct Authority, also applied to at the premises cover.
Underwriting entities of Allianz SE and Zurich Insurance Group Ltd. have current Best's Financial Strength Ratings of A+ (Superior) and A (Excellent). Aviva Insurance Ltd. also has a Best's Financial Strength Rating of A+ (Superior) and entities of entities of Chubb Ltd. have current Best's Financial Strength Ratings ranging from A++ (Superior) to A- (Excellent).
(By Terrence Dopp, senior associate editor, Best’s Review: Terry.Dopp@ambest.com)