In CP Holdings Limited and Ors v Assicurazioni Generali SpA and Ors [2026] EWHC 1520 (Comm), the Commercial Court rejected an attempt by the insureds to recover approximately €160m in Covid-19 business interruption losses under a global insurance programme. The court held that a willingness “in principle” to agree a conformity clause did not amount to an agreement and therefore could not support a rectification claim.

The judgment illustrates the high evidential threshold facing parties seeking rectification of policy wording and confirms that informal assurances or negotiation correspondence are unlikely to be sufficient. The judgment also provides useful guidance for policyholders on the interpretation and application of disease exclusions. Aoife Hay and Arjun Dhar review the decision.

Background

The claimants, who operate hotels, spas, restaurants, and offices across the UK and Europe, sought indemnity from the defendant insurers for business interruption losses suffered during the Covid-19 pandemic (the “Covid-19 BI losses”). The claimants argued that they were entitled to recover approximately €160m under a global ‘all-risks’ property damage and business interruption policy, as well as Hungarian and Romanian local policies.

Rectification of the 2019 global policy

It was common ground that, as drafted, the Covid-19 business interruption losses were excluded under the 2019 global policy. The claimants therefore sought to rectify the policy on the basis that the parties had agreed that the 2019 wording would conform to the 2018 global policy and be no less favourable to the insured.

It is well established that, when seeking rectification, the courts require clear, factual evidence of a common intention between the parties. The claimants relied on correspondence between their broker and the insurers, arguing that it demonstrated “an outward expression of accord and/or a concluded agreement” that the cover available under the 2019 policy would conform to that available under the 2018 policy.

The court rejected that argument. It concluded that the correspondence showed, at most, a willingness in principle to agree a conformity provision rather than objective evidence of a binding agreement. In the court’s view, rectification could not be granted on the basis of “what might have been”. Instead, there must be clear evidence that the parties had actually reached the relevant agreement.

Application of disease exclusion clause

Although the rectification claim failed, the court went on to consider the proper interpretation of the disease exclusion contained in the 2018 policy. The exclusion referred to “SARS, avian flu and/or atypical pneumonia or fear of threat”.

The principal dispute concerned the meaning of “atypical pneumonia”. The insurers argued that the phrase should be interpreted in the context of the exclusion as a whole and by reference to the neighbouring diseases of SARS and avian flu. The court heard expert evidence on virology and epidemiology, with both sides’ experts agreeing that the phrase has various meanings in clinical settings but could be confined to describing a type of pneumonia caused by a known bacterial cause. The claimants contended that it should instead be given this narrower clinical meaning.

The court preferred the claimants’ interpretation. It found no good reason to depart from the established clinical meaning of the phrase and rejected the suggestion that neighbouring references to SARS and avian flu altered the meaning that a reasonable policyholder would attribute to the exclusion. Referring to Bath Racecourse Company Limited and Ors v Liberty Mutual Insurance Europe and Ors [2025] EWHC 1870 (Comm), at [97], the court emphasised that the wording itself did not identify a common thread that would give a “different colour” to the meaning that a reasonable policyholder would attribute to the clause.

The local policies and difference in conditions and limits provision

The insurance programme also included local policies issued in Hungary and Romania. The claimants sought to recover under those policies following the failure of their rectification claim. The 2019 policy contained a difference in conditions and limits (DIC/DIL) provision, a mechanism commonly found in multinational insurance programmes that may allow a master policy to provide cover where local policies do not.

However, because the rectification claim failed, and it was common ground that the 2019 policy did not respond to Covid-19 BI losses, the claimants had to establish their entitlement to coverage under the local policies.

The court was asked to determine (i) whether the losses were covered under the policies and (ii) whether any claim for such losses was time barred. In relation to coverage, the claimants argued that the Hungarian policy responded because the reference to “material damage to the insured assets” was sufficiently broad to encompass non-damage Covid-19 business interruption losses. They argued that the Romanian policy responded because the inclusion of a contagious disease sub-limit indicated that the business interruption section could operate independently of any requirement for physical damage.

The insurers disputed those interpretations and argued that both policies required physical damage as a prerequisite to cover. On their case, neither policy provided cover for pure non-damage business interruption losses, and the Covid-19 losses therefore fell outside the scope of the insurance.

The court agreed with the insurers. Following consideration of expert evidence on Hungarian and Romanian law, it concluded that neither policy provided cover for pure non-damage business interruption losses and that the Covid-19 losses were therefore not recoverable under either local policy.

Although there was no coverage, the claimants were successful on the limitation argument. The court held that the Hungarian claim had been brought within the applicable contractual limitation period and that, under Romanian law, the limitation period did not begin to run until the insurer’s obligation to indemnify arose in early 2023.

Further judgment on policy limits

In a further judgment ([2026] EWHC 1717), the court considered the operation of the €150m policy loss limit, the €10m disease clause sub-limit, the maximum indemnity period and the composite insureds clause.

The insurers argued that the disease clause sub-limit operated as an annual aggregate limit across all insureds and that the composite insureds clause prevented any multiplication of available limits by the number of individual businesses. The claimants contended that the relevant limits applied to each insured loss and that each separate business declared in the annual spreadsheet of insured locations could suffer separate insured losses, even where those losses arose from the same Covid-19 outbreak and related government measures.

The court rejected the insurers’ contention. It held that both the policy loss limit and disease clause sub-limit applied on an “each and every insured loss” basis. In relation to the disease clause, a business interruption loss suffered by one of the claimants’ businesses in the annual schedule would be a separate loss to that suffered by another of its businesses, even if the underlying trigger was the same disease or government measures. However, the policy loss limit did not apply per insured, per insured property or per insured business, but rather per insured loss.

The court also held that the composite insureds clause did not create any annual aggregate cap, but could prevent the multiplication of available limits where, properly construed, the annual spreadsheet declared the operations of multiple insured companies as a single business.

Finally, the court held that the indemnity period started with the commencement of the interruption of or interference with an insured business during which the results of the business in question were affected as a result of that interruption or interference. The indemnity period did not start with the occurrence of the underlying insured peril.

The court’s further findings did not displace the overarching conclusion that no coverage was available for the claimants’ losses, but provided helpful guidance to parties considering coverage and aggregation under similar clauses.

Key takeaways for policyholders

• Informal assurances or negotiation correspondence are unlikely to be enough to secure rectification of policy wording. Policyholders seeking to rectify policy wording will need to demonstrate clear and convincing evidence of a concluded agreement to surpass the high evidential threshold required by the court. Where policyholders intend to preserve cover available under a previous year’s programme, they should ensure that this is reflected expressly in the policy documentation. “Agreements to agree” between brokers and insurers are unlikely to suffice.
• The courts will focus closely on the wording of any disease exclusion and will not automatically interpret these exclusions widely because they appear alongside reference to other diseases. Policyholders should always scrutinise the wording of any such exclusions carefully.
• Terms relating to limits of liability and aggregation of loss need to be considered with careful reference to the policy structure and the nature of interests (joint or composite) insured.
• It should never be assumed that a multinational programme will provide consistent global coverage. Local policies should always be reviewed closely and in tandem with a careful review of the global policy, particularly in relation to limitation provisions.