The owner of a luxury hotel and spa in Cornwall that hosted the 2021 G7 Summit has failed in a bid to reclaim £200,000 in Covid insurance payments.
The High Court case was brought by the Carbis Bay Hotel in St Ives, and the nearby Atlantic Bay Hotel against insurer AIG. Both hotels are part of the same group.
The Carbis Bay Hotel & Estate hosted Boris Johnson, Joe Biden, Angela Merkel, Justin Trudeau, Emmanuel Macron, Mario Draghi, Yoshihide Suga and their partners for the 47th G7 Summit in June 2021.
However in March 2020, like many other hospitality venues, it and the Atlantic Hotel were forced to close because of Covid restrictions.
The hotels had business interruption insurance from AIG limited to a total of £100,000 on each property. According to court documents, the hotels lost significantly more than £100,000, so claimed for the full amount.
However, AIG refused to pay out, saying Covid wasn’t covered by the policy. The hotels sued. The case went to court, and in a ruling handed down last week, the judge backed the insurers.
BII policies became a major issue at the start of the Covid pandemic when businesses started to claim and, in many cases, insurers didn’t pay out. In June 2020, regulator the Financial Conduct Authority brought a test case to rule on many common clauses in the insurance contracts.
The case was fast-tracked though the court system and in January 2021, the Supreme Court ruled, mostly in favour of policyholders.
While this led to thousands of claims being accepted, not all BII disputes can be solved with reference to the Supreme Court judgment. This case is one of them.
According to the ruling, this case focuses on the wording of the policy under the heading “Infectious Diseases”.
The policy says it covers: “Any human infectious or human contagious Disease (excluding Acquired Immune Deficiency Syndrome [Aids] or an AIDS-related condition)
manifested by any person whilst at the Premises or within a 25-mile radius of the Premises.”
However, the definition section of the policy, under the heading “Disease,” lists 33 diseases and doesn’t include Covid.
Lawyers for the hotel argue the policy covers all infectious or contagious diseases but Aids. Lawyers for the insurers argued that it only covers the 33 listed diseases.
Specifically, the hotels lawyers argued, according to the judgment, that the list of 33 diseases can’t be used as a list as they are under the heading “diseases” and the earlier policy wording talks about “infectious diseases”.
However, in his ruling, trial judge HI Judge Russen KC ruled this interpretation was too pedantic.
“The claimants’ case has the effect of transforming a closed-list basis of infectious diseases cover into an entirely open one,” he said.
“This is a significantly different underwriting proposition than the one to which the insurers apparently agreed.
“In my judgment, the ordinary and natural meaning of the language… does not extend to cover in respect of Covid-19.”
He dismissed the case.
Carbis Bay Hotel Ltd & Anor v American International Group Ltd (Sued on Its Own Behalf and on Behalf of All Underwriters Subscribing to Policy P/Cck/10759)
Bristol Business and Property Courts (HHJ Russen KC) 9 May 2025
