High Court Finds WWII Bomb Damage To Be Within The Scope Of War Exclusion Clause

• Law Firm: Gowling WLG
• Subject Matter: Insurance, Litigation, Mediation & Arbitration, Real Estate and Construction, Insurance Laws and Products, Court Procedure, Construction & Planning, Landlord & Tenant - Leases
• Author: Mr Ashley Pigott, Samantha Holland, Emma Knight and Jatinder Sahota
• Published date: 13 April 2023

In the case of Allianz Insurance plc v University of Exeter, the Technology and Construction Court (TCC) held that damage caused by the controlled detonation of a World War II bomb fell within the scope of a War Exclusion clause. As a result, the Court granted the declaration sought by Allianz that it was entitled to decline the University's insurance claim.

Background facts

• In February 2021, contractors working on a site adjacent to the University of Exeter's campus unearthed an unexploded bomb. A safety cordon was immediately imposed around the site, initially at a 100-metre radius and then expanded to 400 metres, and various halls of residence were evacuated.
• The Army's explosive ordnance disposal team were called in to identify the bomb, which was confirmed to be a 1000kg / 2,200lb high explosive bomb dropped by German forces in 1942.
• Due to the bomb's degraded condition, it was decided that the only realistic course of action was to detonate the bomb on site - which despite the mitigation measures adopted by the disposal team, nevertheless caused some damage to surrounding halls of residence.
• The University of Exeter submitted an insurance claim in respect of both the physical damage and business interruption due to the temporary re-housing of students.
• Allianz declined the University's claim on the basis that the loss and damage suffered fell within the scope of the War Exclusion clause, being loss and damage "occasioned by war".

Was the damage "occasioned by war"?

The general insuring clause of the policy was structured such that no liability to indemnify in respect of loss excluded in the policy ever arose. The War Exclusion clause excluded all loss or damage "occasioned by war". The Court noted that the only issue that therefore arose for determination was whether the damage was "occasioned by war":

• if it was, then the claim and damage suffered by the University was excluded by the policy; and
• if it was not "occasioned by war" then the claim and damage would fall within the terms of the insurance cover and the claim must be met.

What was the 'proximate cause' of the loss and damage?

It was common ground between the parties that in order to determine whether the damage was "occasioned by war" the Court would need to apply the proximate cause test.

Counsel for Allianz submitted that the proximate cause of the loss was the dropping of the bomb, which was accepted to be an act of war. In the alternative, it argued that even if the dropping of...