Events, dear boy, events. Business Interruption Coverage under the NDML Nightclub and Late Night Venue Policy (QBE2)

The recent case of FCA v Arch and others [2020] EWHC 2448 (Comm) considered whether policyholders of a number of business interruption insurance products were entitled to cover in respect of the recent Coronavirus pandemic.

One of the wordings considered was the NDML Nightclub and Late Night Venue Policy (QBE2). 

When asked of the greatest difficulty facing a Prime Minister, Harold Macmillan is said to have responsed "Events, dear boy, events." 

Ironically, a nightclub owner in possession of an NDML Nightclub and Late Night Venue Policy might ruefully utter the same response when asked about their inability to claim for COVID 19 business interruption under the policy as a result of the national lockdown in March. Their Lordships held in FCA v Arch and others that the inclusion of the word "event" in the NDML policy to describe "any occurrence of a notifiable disease within a radius of 25 miles of the premises" sets it aside from other similar disease policies containing similar insured perils that are not expressed as being "events." 

The relevant parts of the policy are cited in the judgment at paragraphs 208 -212, but the main aspect of the relevant business interruption section (Section 6) is as follows:

The Wording 

“3.2.4 Infectious disease, murder or suicide, food or drink or poisoning

Loss resulting from interruption of or interference with the business in consequence of any of the following events:

a) any occurrence of a notifiable disease at the premises or attributable to food or drink supplied from the premises;

b) any discovery of any organism at the premises likely to result in the occurrence of a notifiable disease;

c) any occurrence of a notifiable disease within a radius of 25 miles of the premises;

d) the discovery of vermin or pests at the premises which cause restrictions on the use of the premises on the order or advice of the competent local authority;

e) any accident causing defects in the drains or other sanitary arrangements at the premises which causes restrictions on the use of the premises on the order of the competent local authority;

f) any occurrence of murder or suicide at the premises;

provided that the 

g) insurer shall not be liable for any costs incurred in cleaning, repair, replacement, recall or checking of property except as stated below;

h) insurer shall only be liable for loss arising at those premises which are directly subject to the incident;

i) insurer’s maximum liability under this cover extension clause in respect of any one incident shall not exceed GBP 100,000 or 15% of the total sum insured (or limit of liability) for this insured section B, whichever is lesser, any one claim and GBP 250,000 any one period of insurance.”

Definitions

Summary

The Court's judgment of coverage under NDML Nightclub and Late Night Venue Policy (QBE2)  is at paragraphs 230 - 235. 

 

In brief, the Court held:

KEVIN HOLDER © 2020

BARRISTER

33 BEDFORD ROW

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