Jurisdiction(s):
United Kingdom

Bellini v Brit: Court of Appeal upholds physical damage trigger in disease business interruption extension; no COVID-19 cover; correction by construction rejected (England and Wales)

Published on: 14 May 2024

Published by a LexisNexis Insurance & Reinsurance expert

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Article summary

Bellini (N/E) Ltd trading as Bellini v Brit UW Ltd (the Corporate Capital Provider of Lloyd’s Syndicate 2987 for the 2019 Year of Account) [2024] EWCA Civ 435. What are the practical implications of this case?

A run of rulings, beginning with Financial Conduct Authority v Arch Insurance (UK) Ltd [2020] EWHC 2448 (Comm); [2021] UKSC 1, seemed to indicate insureds enjoyed a favourable tide in coronavirus business interruption disputes. This judgment cuts against that. The policy contained a ‘disease’ extension within the business interruption cover, yet the wording required physical damage, as defined by the policy, to be present. The insured’s principal case was that the clause was meant to answer non-damage perils—disease within 25 miles of the premises, murder at the premises, food poisoning, and similar events—so making damage a prerequisite would empty the apparent promise of sense. They argued that, read naturally, such perils were non-damage in character, so grafting on a damage requirement would make the promised protection largely illusory. The Court of Appeal disagreed. Absent damage, the cover was not triggered, and losses caused by the pandemic were not recoverable under the extension...

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