Rockliffe Hall Limited v. Travellers Insurance Company Limited (2021) EWHC 412 (C) (omm)
On the 25th February 2021 the Honourable Mrs. Justice Cockerill handed down a Judgment in the latest Covid-19 business interruption insurance claim dispute to come before the Courts.
The case was brought against Travellers Insurance Company Limited over a dispute into the interpretation of the Disease Clause Extension of the Policy and whether it would extend to cover Covid-19 losses.
Mrs. Justice Cockerill found in favour of the Insurer, granting an Application to strike out the claim brought by the owners of Rockliffe Hall Limited, a five star hotel and resort in County Durham which, like many businesses across the country, was forced to close during the pandemic.
The parties arguments focused upon the wording “infection disease extension to the business interruption” section of the policy. The extension, like many others in use, contained a list of 34 specified diseases which did not include Covid-19.
The wording and construction of many business interruption clauses have, of course, been considered in detail by the High Court and the Supreme Court in a test case brought by the FCA. They did not, however, deal with the type of wording which is at the forefront of this dispute.
In this case the Insurer maintained cover provided by the disease clause extends only to loss amounting to one of the 34 diseases specifically listed in the policy wording. They stress that this list is “closed and exclusive” and as Covid-19 was not included on this list, then the losses resultant from Covid-19 will not be covered.
Rockliffe on the other hand argue that the wording was ambiguous as it contained a number of what it termed “general diseases” which are not attributable to specific causes or pathogens, one of which was plague. The hotel contested the Insurer position that the list was closed and exhaustive, arguing that definition of the general disease should be read widely to include any disease bearing a similarity, such as Covid-19.
Rockliffe went on to argue that the term plague could have various meanings, one of which is any infectious disease which spreads rapidly, has a high mortality rate, an epidemic of such disease.
Mrs. Justice Cockerill was not convinced. She applied the ordinary principle of construction, considering what a reasonable reader would have understood the parties to have meant by the language used, included would be fanciful in the extreme to believe that a reasonable reader would interpret the term plague in that way.
The end of Covid-19 pandemic maybe in sight but the subsequent impact and unanswered questions over Covid-19 are likely to linger for some time. Whilst a negative outcome for the policyholder in this case, every Judgment that deals with the interpretation of policy wording, assists policyholders and insurers alike as it clarifies the position on these issues and provides consistency. This case is one example of an issue that has been the subject of some debate over the past year and has now settled conclusively.
There is, however, one disease which most commentators believe is equivalent to Covid and that is SARS.
The term SARS encompasses a virus which is Covid, a slight variation is Covid-19. However, this has yet to be tested in Court although most legal commentators believe that SARS will succeed.
The alternative, of course, is that if you have such a list of diseases and Covid-19 is not amongst them, then that will be the end of the case for the Claimant. However, it would be the end of the case for any new disease which comes along other than those in the list.
The current decision does seem to be that insurers will fight everything “tooth and nail” and most of the arguments will probably have to be resolved by the Court. This is why it is vital that you seek legal advice from a specialist in this area, such as Specters Solicitors, to ensure you are properly advised and to ensure your rights are properly represented.