The latest from Shoosmiths;
Further guidance for insurers and policyholders on business interruption claims is now available following an award made by Lord Mance in Certain Policyholders v China Taiping Insurance (UK) Co Ltd. Whilst the arbitration award will not be binding on the courts, it will no doubt prove persuasive and represents a victory for insurers, with Lord Mance finding no coverage under the denial of access cause in question.
Unusually, the award was made pursuant to an arbitration agreement entered into after the dispute arose and it was agreed that insurers would pays the costs of the arbitration, the award would be un-appealable, and the award would be published (given its potential significance to other policyholders and insurers).
The award comes in the aftermath of the High Court and Supreme Court decisions in FCA v Arch Insurance (UK) Ltd and Others. Our summary of the High Court decision can be found here, and the Supreme Court decision here.
As ever, this particular legal dispute came down to policy wording, specifically the matter of a business being closed by the Police or a competent local authority. Here’s a little extract;
“Insurers were successful in arguing that the cover was not available because the closures brought about by the various lockdowns in response to COVID-19 were not actions of the “Police or other competent local authority”.
You can read the full Shoosmiths summary here.