The lockdowns imposed as a result of the Covid-19 pandemic meant many businesses were unable to trade as normal. When businesses brought insurance claims to secure compensation for business interruption, insurers often refused to pay out, leading to litigation.
This series of disputes started with an initial test case brought by the FCA in June 2020, and is set to culminate with a judgment on the crucial issue of furlough payments in 2025.
The journey of Covid-19-related insurance litigation is illustrated in this timeline, in which we have analysed all the key decisions.
Covid-19 business interruption litigation: the road so far

Divisional Court hands down first instance judgment following Financial Conduct Authority’s test case. Partial success for policyholders. Leapfrog appeal to the Supreme Court is ordered.

Commercial Court hands down judgment in TKC v Allianz, in which it was found that Covid-19 did not cause loss of property

Supreme Court finds in favour of policyholders in the FCA Test Case; provides significant ruling on causation that paves the way for further wordings to respond to cover Covid-19 losses.

Judgment handed down in Rockliffe Hall v Travelers in which Covid-19 was found not to be ‘plague’, such that the specified disease cover would not respond as it expressly covers certain diseases, of which Covid-19 was not one.

Lord Mance hands down public award in China Taiping Arbitration; considers that the Supreme Court’s findings on causation may have a wider application than just the disease wordings considered by the Supreme Court.

Judgment handed down in Corbin & King v Axa. Mrs Justice Cockerill finds in favour of policyholders on coverage and aggregation. Policyholders with a non-damage denial of access wording entitled to recover on the basis of the Supreme Court’s findings on causation. Their composite policy and ‘any one claim’ wording entitle the policyholders to separate limits of indemnity per insured entity and per premises. Axa did not appeal.

First instance judgments in Stonegate v MS Amlin & Ors, Greggs v Zurich and Various Eateries v Allianz. Court finds that losses do not aggregate to a single occurrence, paving the way for policyholders to recover multiple limits of indemnity; but denies policyholders a ‘per premises’ recovery. Mr Justice Butcher considered that insurers are entitled to deduct from indemnity the ‘furlough’ payments that policyholders received from the government.

Aggregation decision in Pizza Express v Liberty Mutual. Pizza Express was not entitled to a per premises recovery due to the construction of its ‘occurrence’-based wording. Permission to appeal was denied.

Commercial Court rules in favour of policyholders in ‘At the Premises’ test case, London International Exhibition Centre Plc v RSA & Ors. Mr Justice Butcher found that the Supreme Court’s ruling on causation in the FCA Test Case also applies to this additional category of disease wordings.

Further test case, Gatwick Investments, including other groups of policyholders such as Liberty Retail and Bath Racecourse in which policyholders sought to argue that that the Supreme Court’s findings on causation can also extend to Liberty Mutual’s prevention of access (non damage) wording, and that multiple limits were available pursuant to composite policies of insurance.

Stonegate settles its dispute with MS Amlin & Ors shortly before appeal is to be heard. This leaves first instance decision on furlough undisturbed, and which favours insurers

Various Eateries v Allianz appeal is heard. The furlough issue is not live, but Court of Appeal is asked to reconsider the key aggregation issues; namely whether losses aggregate to a single occurrence or whether multiple limits of indemnity are available.

Court of Appeal hands down judgment in Various Eateries v Allianz. All appeals and cross-appeals dismissed.

Court rules in favour of policyholders on the key issues in the Gatwick Investments test case. However, furlough is again decided in favour of insurers as Mr Justice Butcher’s judgment in Stonegate is followed. Permission to appeal is granted on most issues including furlough.

Court finds against International Entertainment Holdings in its claim against Allianz under its ‘policing authority’ wording. The government is not considered to be a ‘policing authority’ so the policyholder is not entitled to cover.

Sir Richard Aikens hands down public arbitration award in relation to Salon Gold policyholders v Canopius. Supreme Court’s analysis on causation against applied in favour of policyholders with a non-damage denial of access wording, and which responds to an insured peril within the ‘vicinity’ of the premises.

Mrs Justice Cockerill grants Flat Iron and Wahaca summary judgment against QIC in relation to its non-damage denial of access wording that responds to a danger within the ‘immediate vicinity’. Permission to appeal granted but both policyholders settled their disputes later in 2024.
Court of Appeal says no cover for Covid-19 losses under damaged-based policy wording in Bellini v Brit.

Court of Appeal upholds ‘At the Premises’ ruling in favour of policyholders.

Court of Appeal determines pandemic was a “catastrophe” under reinsurance contract.
Court of Appeal determines Covid-19 is an “incident likely to endanger life” in International Entertainment Holdings Ltd v Allianz.

Supreme Court denies insurers permission to appeal in ‘At the Premises’ test case, meaning the Court of Appeal’s policyholder favourable decision is final.

Bath Racecourse defends insurers’ appeals in relation to Commercial Court ruling in favour of policyholders in relation to the ‘composite policy issue’, i.e. that policyholders with multiple insured entitles under a composite policy are entitled to their own limits of indemnity. Causation also again the subject of appeal.

Bath Racecourse appeals the insurer-favourable decision on furlough. This is the first time that the Court of Appeal is asked to examine the issue.
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This article is an extract from The Policyholder Review 2024/25. A detailed review and commentary on the key developments and trends across various commercial lines of insurance.
