Shipping Case Digest November 2020

• Published date: 29 November 2020
• Subject Matter: Insurance, Coronavirus (COVID-19), Insurance Laws and Products, Insurance Claims
• Law Firm: Hill Dickinson
• Author: Mr Lewis Moore, Toby Miller, Chris Primikiris, Victor Oliynik and Charlotte Wood

As the first of the COVID-19 cases make their way through the courts, this case considers whether losses suffered by businesses as a result of forced closures under the Health Protection (Coronavirus, Business Closure) (England) Regulations 2020 can be recovered under standard form insurance policies.

Factual background

On 21 March 2020, a cafe owned by TKC London Limited (TKC) was forced to close and cease selling food or drink for consumption on the premises as a result of measures adopted under the Health Protection (Coronavirus, Business Closure) (England) Regulations 2020 (the Coronavirus Regulations). During the period of forced closure, certain stock, consisting primarily of dairy, fruit and veg, meat and fish and frozen goods, deteriorated and were therefore unusable. The cafe did not reopen until 4 July 2020.

TKC sought to recover the losses it had suffered as a result of the forced closure under a commercial select insurance policy (the Policy) held with Allianz Insurance plc (Allianz).

This case chiefly concerned the interpretation of the following two terms under the Policy.

1. Property damage all risks section (the property damage section)

This section provided cover for 'Damage to Property Insured at the Premises'.

Damage was defined as 'accidental loss or destruction of or damage to Property Insured'.

Property/Property Insured included 'buildings, contents, stock and other items shown and/or described in the schedule.'

2. Business interruption all risks estimated revenue (the business interruption section)

This section provided cover for 'Business Interruption by any Event'.

Business Interruption was defined as 'loss resulting from interruption of or interference with the Business carried on by the Insured at the Premises in consequence of an event to property used by the insured at the premises for the purpose of the Business'. Event was defined as 'accidental loss or destruction of or damage to property'.

There was also a 'basis of settlement' clause which provided: 'the insurer will pay the Insured in respect of each item covered, the amount of their claim for Business Interruption, provided that at the time of any event (a) there is an insurance in force covering the interest of the insured in the property at the Premises against such Event; and that (i) payment has been made or liability has been admitted for payment...'

Both of the above sections also contained specific exclusions from the cover provided. Two of note were for...