The High Court Rules On Covid-19 Business Interruption Claim By The Clarence Hotel

• Published date: 31 May 2021
• Subject Matter: Insurance, Coronavirus (COVID-19), Insurance Laws and Products, Government Measures, Operational Impacts and Strategy
• Law Firm: Ronan Daly Jermyn
• Author: Ms Lisa Mansfield and Aoife Farrell

In a recent judgment, the High Court has ruled that a hotel is not covered for losses from the Covid-19 pandemic under their business interruption insurance policy with AXA.

McDonald J. handed down his decision in Brushfield Limited (t/a The Clarence Hotel) -v- Arachas Corporate Brokers Limited and AXA Insurance Designated Company¹, on 19 April 2021.

Case Facts

The plaintiff who trades under the title of "The Clarence Hotel", entered into an insurance contract with AXA on 1 April 2019 which contained cover with regards to business interruption. The policy comprised of two relevant non-damage business interruption extensions: MSDE clause (murder, suicide, or disease clause) and denial of access non-damage clause. The former clause contained a list of specified human infectious diseases covered under the policy. However, notably Covid-19 was not listed. The latter clause responded where losses are sustained arising from "the actions taken by the police or any other statutory body in response to a danger or disturbance at your premises or within a 1-mile radius of your premises".

Main Issues

1. Whether the MSDE clause provided cover for business interruption losses caused by Covid-19, even though Covid-19 (or any other variant) was not directly listed in the clause.
2. Whether the MSDE clause provided cover for...