(Reuters) – The owners of London’s ExCel conference center won a court order on Friday against insurers, including Royal & Sun Alliance Insurance Ltd., over pandemic-related losses, which its lawyers said could affect hundreds of thousands of policyholders.
London International Exhibition Center PLC brought legal action at London’s High Court last year over business interruption losses caused by the Covid-19 pandemic and claimed 16 million pounds ($20.5 million) under its insurance.
The test case, which also included a similar lawsuit brought by restaurant chain Pizza Express, concerned “in place” clauses in various policies and whether business closures were covered.
Judge Richard Jacobs ruled in a ruling published on Friday that the UK High Court̵7;s 2021 ruling on sickness clauses in insurance – a case brought by Britain’s market regulator, the Financial Conduct Authority – also applied to the premises.
The judge said several claims brought by policyholders following the FCA case had been settled by the insurers.
But business interruption cases that had gone to trial involved either radius sickness coverage, related to policies that cover cases of a disease within a specified radius, or some other insured peril, such as prevention of access. Judge Jacob’s ruling found local coverage to be indistinguishable from radiation protection.
Law firm Stewarts Law LLP, which represented the owners of the ExCel Centre, said the ruling “potentially affects hundreds of thousands of policyholders.”
“Policyholders whose BI losses remain uncompensated should now review their policy documents to consider whether they may now have a valid claim to pursue,” the company said in a statement.
RSA declined to comment. Allianz SE, which was also a defendant in the test case, said it was reviewing the ruling’s implications.
Becky Rogers, head of property claims at Allianz Commercial, said in a statement that the company would need to consider its position in light of the ruling.
“In the meantime, (we) will be working through how it is likely to affect those of our policyholders who have outstanding covid-19 business interruption claims due to sickness on the premises clauses,” she said.