CORBIN & KING LIMITED v AXA INSURANCE UK PLC

A non-damage denial of access clause can extend to disease where its wording covers a danger within a specified radius. The radius requires a local manifestation of the danger, but not an exclusively local risk. A local case of disease may therefore be a concurrent cause of national restrictions, together with cases elsewhere. Where a policy expressly excludes only listed diseases, unlisted diseases may remain capable of triggering other cover. A composite policy ordinarily operates as separate contracts with each insured, so a per-claim limit applies separately to each insured’s premises and each covered restriction unless the wording clearly provides otherwise.

The claimant companies operated restaurants and cafés under a Business Combined Insurance policy issued by the defendant insurer. The policy contained a non-damage denial of access clause covering loss resulting from interruption or interference with the business where access was restricted or hindered for more than two hours by police or another statutory body responding to a danger or disturbance at the premises or within a one-mile radius. Disease listed in the policy’s murder, suicide or disease cover was excluded.

The parties agreed that government COVID-19 regulations caused three periods of closure or restriction. The court had to decide whether the clause responded to those restrictions and, if so, whether the £250,000 limit applied once across all premises or separately to each insured’s premises and each restriction.

1. Coverage. The court was not bound by the Divisional Court decision in The Financial Conduct Authority v Arch Insurance (UK) Limited and others ([2020] EWHC 2448) because the relevant point had not been squarely argued and decided there, and the present wording and argument differed. The Supreme Court decision in The Financial Conduct Authority v Arch Insurance (UK) Limited and others ([2021] UKSC 1) did not undermine the Divisional Court’s decision, but its treatment of concurrent causation materially altered the context.
2. On orthodox construction, “danger” was capable of including disease. The one-mile radius required a local manifestation but did not confine cover to an exclusively local risk. “Any other statutory body” was wide enough to include central government. The exclusion of diseases listed in the policy’s murder, suicide or disease cover indicated that unlisted diseases were not automatically excluded from the NDDA clause.
3. The Supreme Court’s broader causation approach was adopted. COVID-19 within one mile of the premises was capable of being a danger which, together with other uninsured but non-excluded cases elsewhere, caused the regulations, closures and business interruption loss. The claimants therefore established cover in principle.
4. Quantum. The policy was composite: each insured company had a separate interest and the policy operated as separate contracts between the insurer and each insured. The £250,000 limit therefore applied to each insured’s premises and each of the March 2020 closure, September 2020 restriction and November 2020 closure, subject to proof of loss.
5. The claims of the Second, Third, Fifth, Seventh, Ninth and Tenth Claimants succeeded. Declarations were granted that the insurer was bound to indemnify each in respect of each premises up to £250,000 for each restriction, alternatively to pay damages for wrongful failure to indemnify. No declarations were made for the other identified claimants on the agreed basis.