Business Interruption Insurance Claims For Covid-19 Losses

Significant ruling of the Irish High Court awaited for policyholders having “at the premises” infectious disease wording.

Mr Justice McDonald in the Irish Commercial Court heard further legal argument on Wednesday 22nd January 2025 in the second module in the business interruption insurance Test Case between Marlin Apartments Ltd t/a Marlin Hotel Dublin v. Allianz Plc.

The Test Case considers policyholder entitlements in an “at the premises” business interruption insurance policy.

Kent Carty Solicitors LLP appeared for Marlin Hotel Dublin in this important Test Case on “at the Premises” business policy wording. The trial of the action was in June 2023 and Mr Justice McDonald delivered his first ruling on 19th September 2024 [2024] IEHC 550.

The main trial considered the hotel’s entitlement to cover for its Covid-19 related losses where there was a Policy Extension for losses caused by government restrictions enacted as a result of the occurrence of a notifiable infectious disease “at the premises”.

Kent Carty Solicitors LLP were pleased to have succeeded at trial on their hotel’s entitlement to cover (up to the policy limit) for losses as a result of restrictions on the operation of the hotels, public houses and other businesses by the Regulations¹ enacted on Minister Stephen Donnelly on 23rd December 2020 which took effect from 3pm on 24th December 2020.

The judgment of Mr Justice McDonald delivered on 19th September 2024 was the first Irish case decided in favour of a policyholder with “at the premises” cover. This issue has also come before the English Courts in its ExCeL Centre judgment.² Importantly, the Court held that each individual occurrence of Covid-19 was a concurrent cause of the proximate Regulations.

The Court also held that “at the premises” cover should not be treated differently to a situation where the policyholder was entitled to cover if there was an occurrence of Covid-19 within an applicable radius of the premises, such as the 25 mile radius in the FBD Test Case. This means the Court’s ruling will also benefit policyholders with other insurers. An additional new module of the Marlin Hotel Dublin v Allianz proceedings was requested by Allianz plc. The insurer asked the Court to give further guidance on how long an occurrence of Covid-19 at the premises should be treated as causative of later-enacted Regulations and how long prior to a diagnosis with Covid-19 an insurer should consider a person to have been infectious. A ruling on this issue is awaited.

The court’s ruling on 19th September 2024 brings welcome clarification for policyholders and the second module will provide further assistance to insurers and policyholders.

Any enquiries can be directed to Gavan Carty, Managing Partner, or Tara Nolan, Solicitor.

Footnotes

1. S.I. No. 695/2020 – Health Act 1947 (Section 31A – Temporary Restrictions) (Covid-19) (No. 9) (Amendment) (No. 2) Regulations 2020.
2. London International Exhibition Centre Plc v Royal & Sun Alliance Insurance Plc & Ors [2023] EWHC 1481 (Comm) – see the appeal judgment: https://www.bailii.org/ew/cases/EWCA/Civ/2024/1026.html