Judgment has recently been handed down in the matter of Corbin & King v Axa. In this case Mrs Justice Cockerill, sitting in the Commercial Court, held that a non-damage denial of access clause provided business interruption cover to a number of well-known restaurants (and therefore a number of separate insureds) which had been forced to close for periods due to Covid-19 restrictions. However, permission to appeal has been granted.
The clause covered "loss insured by this section resulting from interruption or interference with the business where access to your premises is restricted or hindered [...] arising directly 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". Similar clauses were considered in the first instance decision in FCA v Arch (2021), in which the Divisional Court held that there was no cover because, as a matter of construction, such clauses were intended to cover localised incidents, such as bomb scares or gas leaks. (No appeal on the relevant points was made to the Supreme Court.) Mrs Justice Cockerill considered that she was bound by the Divisional Court's decision, but distinguished the situation before her on the basis of: (i) differences in the wordings considered; and (ii) differences in the arguments raised.
Mrs Justice Cockerill concluded that, on an orthodox approach to construction, the clause provided a localised cover, but one which was capable of extending to disease. The natural reading of the clause was that the driver of the clause is the result, not the nature of the danger which produces it. There was no reason why that danger could not be one or more cases of COVID-19 within the radius.
As to causation, Mrs Justice Cockerill concluded that the Supreme Court's approach in FCA v Arch should be adopted. On that basis, COVID-19 was capable of being a danger within one mile of the insured premises, which, coupled with other uninsured but not excluded dangers outside (i.e. other incidences of COVID-19), led to the regulations which caused the business interruption losses.
Mrs Justice Cockerill further concluded that, as a matter of construction, the overall picture which emerged from a consideration of the wording and of the nature of the policy was that this was a composite policy in respect of which each insured was entitled to claim £250,000 in respect of each period of closure, as opposed to there being one £250,000 claim overall for each such period. Permission to appeal certain aspects of the judgment to the Court of Appeal has been granted.
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