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‘All risks’ business interruption policies & COVID-19

Covid-19 has thrown business (and life) in turmoil. Many businesses do have standard ‘all risks’ business interruption policies but do such policies provide cover for losses resulting from Covid lockdown measures? This question was up before an English court in TKC London v Allianz [2020].

The assured operated a café. Lockdown measures required businesses of that kind to close. Owners of the café wanted to claim for their losses from Allianz under the business interruption (BI) policy which provided cover for BI caused by 'accidental loss or damage to property'.


The BI section provided cover for interruption due to any event and BI was defined as ‘loss resulting from interruption with the Business…in consequence of any event’. 'Event’ was defined as ‘accidental loss or destruction of or damage to property’. Allianz’s position was that temporary closure was not an ‘event’.


The court agreed that what happened was BI but it was not caused by an ‘event’. Reason being, a word takes its colour from its context and the immediate context for the word ‘loss’ included ‘destruction’ & ‘damage’. Economic loss was not covered.


The case demonstrates that despite the pandemic, courts are unlikely to interpret the clauses generously. They will go by policy wording.



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