The latest in a slew of test cases over business interruption insurance (BII) policies triggered during the Covid-19 pandemic is taking place in London this week.
The case, Gatwick Investment Ltd T/A Crowne Plaza London Gatwick Airport and others v Liberty Mutual Insurance Europe SE, raises issues about denial of access (non-damage) cover, a policy clause usually designed to provide cover for localised occurrences that interfere with the running of a business.
This test case arises from a claim made by the owners of the Crowne Plaza Hotel in Gatwick (Gatwick Investment Ltd) to their insurers Liberty Mutual Insurance Europe for losses incurred during the pandemic.
Lawyers for the hotel argue that the national lockdowns that were a feature of the pandemic triggered the policy. Lawyers for Liberty Mutual disagree.
The case also raises issues relating to credit for furlough payments.
Gatwick Investment is the lead claimant in the case. Other linked claimants include the owner of department store Liberty, theatre company Ambassador Theatre Group, restaurant chain Pizza Express, entertainment venue Hollywood Bowl, pub company Fullers, hotelier Starboard Hotels and Bath Racecourse.
The case is to be heard in the Commercial Court and is scheduled to last eight days. It is one of at least 10 complicated insurance cases relating to business interruption caused by the pandemic.
BII has been an important source of litigation since the start of the pandemic in 2019.
Soon after the first lockdown, businesses claimed on their various BII polices and, in many cases, had their claims refused or put on hold due to complicated wording.
This led to fast-tracked litigation brought by regulator the Financial Conduct Authority examining the wording of key BII policies across the insurance industry.
The litigation affected close to 400,000 policy holders and was expedited, via online hearings, to the Supreme Court.
In January 2021 the Supreme Court backed many of the arguments brought by policyholders.
Even though the case unlocked payouts for many claimants, the courts are still considering policies and issues that were not resolved by the Supreme Court ruling.
Gatwick Investment Ltd T/A Crowne Plaza London Gatwick Airport and others v Liberty Mutual Insurance Europe SE
Court of Appeal
Linked cases:
Liberty Retail Ltd and others v Liberty Mutual Insurance Europe SE and another
Hollywood Bowl Group Plc v Liberty Mutual Insurance Europe SE
PizzaExpress Group Ltd and others v Liberty Mutual Europe SE and another
Fuller Smith & Turner PLC v Liberty Mutual Europe SE and another
International Entertainment Holdings Ltd v Allianz Insurance Plc
Starboard Hotels Ltd and others v Liberty Mutual Europe SE
Bath Racecourse Company Limited and others v Liberty Mutual Insurance Europe SE and others
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