Jurisdiction(s):
United Kingdom

Bath Racecourse v Liberty Mutual: Court of Appeal confirms separate insured limits under composite BI policies and deductibility of CJRS furlough; Supreme Court appeal pending (England and Wales)

Published on: 08 August 2025

Published by a LexisNexis Arbitration expert

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Article summary

Bath Racecourse Company Ltd and others v Liberty Mutual Insurance Europe SE and others [2025] EWCA Civ 153

What are the practical implications of this case?

This Court of Appeal decision brings welcome certainty to insurers, brokers and policyholders handling pandemic-related BI claims. It confirms that composite policies, typical in group programmes, are to be read as a bundle of distinct contracts, so each insured benefits from its own indemnity limit unless the wording plainly dictates otherwise. This construction averts disputes about pooled limits within group arrangements.

Importantly, the court ruled that furlough sums received under the UK CJRS must be deducted from business interruption recoveries pursuant to standard savings provisions. Applying the concurrent causation approach from the FCA test case, the court found that such payments:

directly curtailed wage expenditure;
were made in consequence of government restrictions (ie, the insured peril); and
do not qualify as collateral or benevolent receipts.

Each of the insurers’ objections was expressly dismissed...

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