Latest Covid-19 business interruption insurance success – Salon Gold

In an arbitration award issued on 31 January 2024 and made public with the agreement of the parties, Sir Richard Aikens has ruled in favour of 300+ policyholders on coverage under a ‘Public Emergency’ prevention of access BI clause which responded to loss caused by “the actions or advice of a government or local authority due to an emergency likely to endanger life or property in the vicinity of the Premises”.

The policyholders were represented by Peter Ratcliffe of 3VB, led by Jeffrey Gruder KC of Essex Court Chambers and instructed by RLK Solicitors and Hugh James.

Rejecting the argument that the clause provided only ‘localised’ cover, Sir Richard found that there is no requirement for the emergency to have occurred within the vicinity of the Premises as long as it endangered life within the vicinity. Since it was common ground that the Covid-19 pandemic constituted a national public health emergency, there was an emergency in the vicinity of all Premises in the UK at the relevant times (and, accordingly, there is no requirement for a policyholder to prove an occurrence of Covid-19 in the vicinity of their particular Premises in order to establish cover).

In reaching his decision, Sir Richard concluded that he was not bound by the findings of the Divisional Court in the FCA Test Case on coverage under the similarly-worded RSA 2.1 and 2.2 clauses, determining that the coverage issue in the present case had not been ‘squarely decided’ by the Divisional Court.

The Award also contains some obiter discussion of considerations applicable to determining the ‘vicinity’ of Premises.

The Award can be found here.