Business interruption insurance claim struck out

The Newcastle Circuit Commercial Court struck out and summarily dismissed a hotel's claim against its insurers for business interruption losses resulting from COVID-19.

The policy contained a clause that defined the meaning of the term "Infectious Disease", for which cover applied. The list of diseases in the clause was detailed and exhaustive but did not include COVID-19.

The policy included cover for loss in consequence of, among other things:

"1. Infectious Disease manifested by any person whilst at the Business Premises which results in closure of the whole or part of the Business Premises by the order of an appropriate competent authority.

2. An outbreak of Infectious Disease within 10 miles of the Business Premises."

The judge held that the clause only covered loss resulting from one of the diseases listed in the policy. The list was detailed and specific and did not use the word “includes” or similar.

This issue was not considered in Financial Conduct Authority v Arch Insurance (UK) Limited and others [2021] UKSC 1 (the FCA test case). The judge disagreed that the list was similar to the list of Notifiable Diseases in the policies considered in the FCA test case so that a disease was included if it bore a reasonable similarity to the diseases listed. The Notifiable Disease clause expressly referred to an externally-maintained and dynamic list regularly updated by the government while the policy in this case set out its own static list including the diseases known to the parties at the time.

Rockliffe Hall Ltd v Travelers Insurance Company Ltd [2021] EWHC 412 (Comm) (25 February 2021).