The judgment, handed down on Friday (16 June), covered a series of test cases brought by businesses that also included London International Exhibition Centre Plc, owner of the ExCel London conference centre, which is seeking a £16m payout against insurers including RSA and Allianz.
In his ruling, Judge Richard Jacobs said that the Supreme Court’s ruling from 2021, which decided that businesses with applicable policies could claim if there had been a case of Covid in the vicinity of their premises, also applied to ‘at the premises’ cover.
He said: “This seems to me to be an appropriate result, since any other conclusion would give rise to anomalies which it would be difficult rationally to explain to a reasonable [small or medium-sized business] policyholder who read the policy.”
To say otherwise, he added, would hypothetically give rise to a situation where one restaurateur who caught Covid could not claim on his own ‘at the premises’ policy, but his next-door neighbour could use that infection to claim on their policy requiring an infection in the ‘vicinity’.
Aaron Le Marquer, head of policyholder disputes at law firm Stewarts, which acted for ExCeL, told the FT that the result could lead to hundreds of thousands more claims.
“It’s possible that there might be some very big claims to come out of this as well as a lot of small claims,” he said.
Businesses have been battling to obtain payouts under their business interruption insurance since the onset of the pandemic, but initially many leading insurers argued that their policies did not provide cover and refused to payout.
In January 2021, however, the Financial Conduct Authority (FCA) won a landmark test case against insurers over pandemic claims, which did lead to a rise in payouts.
Many operators, though, still found themselves stuck in limbo following the case, with insurers accused of continuing to 'sit on their hands' over business interruption claims.