Executive Summary
This case concerns business interruption (BI) insurance claims by Bath Racecourse Company Ltd and 21 related claimants ("the Cs") against three insurers ("the U/Ws")—Liberty Mutual Insurance Europe SE, Allianz Insurance PLC, and Aviva Insurance Ltd—arising from COVID-19 lockdown measures in England and Wales during 2020. The claimants operate racecourses, greyhound tracks, golf clubs, hotels, and related services. The dispute centers on the interpretation and application of BI cover under the denial of access extension in their policies, specifically whether certain regulatory actions qualify as triggers, and how policy limits apply. The court has addressed multiple preliminary issues, with some resolved by agreement and others pending, including the role of the British Horseracing Authority (BHA) and Greyhound Board of Great Britain (GBGB) as competent authorities.
Sanctions Highlights
- Sanctions implications are present, notably referencing the UK’s BIS (Department for Business, Innovation and Skills) regulatory framework.
- The case indirectly highlights compliance risks for insurers and insured entities operating under evolving government mandates and regulatory controls during crises.
- The insurers’ acknowledgment of COVID-19 cases within a mile of insured premises aligns with regulatory triggers, underscoring the importance of sanction-compliant risk assessments in pandemic-related claims.
Emerging Risks
- Ambiguity in defining “competent authority” actions (e.g., BHA and GBGB instructions) creates uncertainty in BI claim triggers.
- The complexity of applying “any one loss” limits across multiple claimants with interconnected operations increases litigation risk.
- Potential Supreme Court appeal on furlough payment offsets may affect future claim valuations and insurer liabilities.
- Arbitration agreement interpretation may impact dispute resolution timelines and costs.
Geopolitical Impact
- The case reflects UK regulatory responses to COVID-19, with direct implications for Canadian and Chinese insurers operating in the UK market, given the involvement of multinational insurers.
- UK’s tiered lockdown and regulatory regime contrasts with approaches in Canada and China, influencing cross-jurisdictional insurance claims and policy drafting.
- The case underscores the UK’s legal environment for pandemic-related insurance claims, informing geopolitical risk assessments for insurers and investors in these countries.
Economic Intelligence
- The claimants’ operations span multiple leisure sectors severely impacted by COVID-19 restrictions, highlighting the economic strain on hospitality and sports industries.
- Insurers face significant exposure due to aggregated BI claims under denial of access extensions, with individual limits of £2.5m per claimant.
- The case illustrates the financial interplay between government support schemes (e.g., furlough payments) and private insurance recoveries.
- Resolution delays and ongoing appeals contribute to uncertainty in financial planning for both insured parties and insurers.
Strategic Recommendations
- Insurers should clarify policy language regarding “competent authority” and loss aggregation to reduce future litigation.
- Legal teams must monitor Supreme Court developments on furlough payment offsets to adjust claim strategies accordingly.
- Risk managers in affected sectors should document regulatory compliance and operational impacts meticulously to support claims.
- Multinational insurers should align pandemic response policies with UK regulatory frameworks to mitigate geopolitical and sanction risks.
- Parties should consider arbitration clauses carefully to optimize dispute resolution efficiency and cost-effectiveness.
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**Source Notes:**
Case Title: Sanctions Intelligence Digest
Link: https://empyreanprotocol.com/litigation/view/www.bailii.org/ew/cases/EWHC/Comm/2025/1870.html