‘[69] A disease that spreads is not something that occurs at a particular time and place and in a particular way: it occurs at a multiplicity of different times and places and may occur in different ways involving different symptoms of greater or less severity. Nor for that matter could an “outbreak” of disease be regarded as one occurrence, unless the individual cases of disease described as an “outbreak” have a sufficient degree of unity in relation to time, locality and cause. If several members of a household were all infected with COVID-19 when a carrier of the disease visited their home on a particular day, that might arguably be described as one occurrence. But the same could not be said of the contraction of the disease by different individuals on different days in different towns and from different sources. Still less could it be said that all the cases of COVID-19 in England (or in the United Kingdom or throughout the world) which had arisen by any given date in March 2020 constituted one occurrence. On any reasonable or realistic view, those cases comprised thousands of separate occurrences of COVID-19. Some of those occurrences of the disease may have been within a radius of 25 miles of the insured premises whereas others undoubtedly will not have been. The interpretation which makes best sense of the clause, in our view, is to regard each case of illness sustained by an individual as a separate occurrence. On this basis there is no difficulty in principle and unlikely in most instances to be difficulty in practice in determining whether a particular occurrence was within or outside the specified geographical area.’
‘[212] We conclude that, on the proper interpretation of the disease clauses, in order to show that loss from interruption of the insured business was proximately caused by one or more occurrences of illness resulting from COVID-19, it is sufficient to prove that the interruption was a result of Government action taken in response to cases of disease which included at least one case of COVID-19 within the geographical area covered by the clause. The basis for this conclusion is the analysis of the court below, which in our opinion is correct, that each of the individual cases of illness resulting from COVID-19 which had occurred by the date of any Government action was a separate and equally effective cause of that action (and of the response of the public to it)….’
‘… The concept of business interruption in insurance of this kind was in our view correctly analysed by Mr Simon Salzedo QC in his submissions on behalf of Argenta. It is a description of the type of loss or damage covered by the policy, in the same way as the type of loss or damage covered by, for example, a buildings insurance policy is physical destruction or damage. Thus, in a buildings insurance policy, unless the policy otherwise provides, the insurer is liable for the contractual measure of (i) destruction of or physical damage to the insured buildings, which is (ii) proximately caused by (iii) a peril insured against under the policy (such as fire, storm etc). In business interruption insurance an interruption to the policyholder’s business or activities is the counterpart of the first of these elements. It describes the nature of the harm to the policyholder’s interest in the subject matter of the insurance for which an indemnity is given if it is proximately caused by an insured peril.’
‘…The core principle is that an insurance policy, like any other contract, must be interpreted objectively by asking what a reasonable person, with all the background knowledge which would reasonably have been available to the parties when they entered into the contract, would have understood the language of the contract to mean.’
‘… the overriding question is how the words of the contract would be understood by a reasonable person. In the case of an insurance policy of the present kind, sold principally to SMEs, the person to whom the document should be taken to be addressed is not a pedantic lawyer who will subject the entire policy wording to a minute textual analysis … It is an ordinary policyholder who, on entering the contract, is taken to have read through the policy conscientiously in order to understand what cover they were getting.’
‘The contrast is between “originating” coupled with “cause” in Cox v Bankside Members Agency Ltd[1995] 2 Lloyd’s Rep 437 , and “event” in the present case. In my opinion, these expressions are not at all the same, for two reasons. In ordinary speech, an event is something which happens at a particular time, at a particular place, in a particular way. … A cause is to my mind something altogether less constricted. It can be a continuing state of affairs; it can be the absence of something happening. Equally, the word “originating” was in my view consciously chosen to open up the widest possible search for a unifying factor in the history of the losses which it is sought to aggregate. To my mind the one expression has a much wider connotation than the other.’
‘In assessing the degree of unity regard may be had to such factors as cause, locality and time and the intentions of the human agents. An occurrence is not the same thing as a peril, but in considering the viewpoint or focus of the scrutineer one may properly have regard to the context of the perils insured against.’
‘… Nevertheless, it seems to me ultimately to be inherent in the concept of aggregation (“arising out of one event”) that a significant causal link is required. … A plurality of losses is to be regarded as a single aggregated loss if they can be sufficiently linked to a single unifying event by being causally connected with it. The aggregating function of such a clause is antagonistic to a weak or loose causal relationship between losses and the required unifying single event. This is the more easily seen by acknowledging that, once a merely weak causal connection is required, there is in principle no limit to the theoretical possibility of tracing back to the causes of causes. The question therefore in my judgment becomes: Is there one event which should be regarded as the cause of these losses so as to make it appropriate to regard these losses as constituting for the purposes of aggregation under this policy one loss?’
‘In my judgment, the three requirements of a relevant event are that there was a common factor which can be properly described as an event, which satisfied the test of causation and which was not too remote for the purposes of the clause.’
‘… Are the losses to be aggregated as all arising from one event? That question can only be answered by finding and considering all the relevant facts carefully, and then conducting an exercise of judgment. That exercise can be assisted by considering those facts not only globally and intuitively and by reference to the purpose of the clause, but also more analytically, or rather by reference to the various constituent elements of what makes up one single unifying event. It remains an exercise of judgment, not a reformulation of the clause to be construed and applied.’
‘In the context of business interruption insurance, the ease with which an insured may establish matters relevant to its claim for indemnity may influence questions of construction. The purpose of business interruption insurance is to inject additional funds into a going concern to maintain it as a going concern and, in that respect, to return it to an operational state as soon as possible: Arbory Group Ltd v West Craven Insurance Services (A Firm) [2007] Lloyd’s Rep IR 491 [48]-[50]; Adelaide (SA) Pools and Spa Manufacturing and Installation Pty Ltd v Westcourt General Insurance Brokers Pty Ltd (No. 2) [2021] SASC 123 [990]. That being so, a construction which advances the purpose of the cover is to be preferred to one that hinders it. Here, that approach supports an interpretation that the relevant integer of the insured peril is satisfied when it is shown that the authority has acted upon its belief as to the existence of an outbreak. That can be established relatively quickly by reference to the authority’s statements and surrounding existing facts. Not only would an insured encounter substantive difficulties if it were required to establish those matters as actual facts, the extended period of time which it would take may well deprive it of the benefit of the cover.’
‘Where the Insured has made a claim for a Single Property Loss and/or a Single Business Interruption Loss affecting one or more Insured Locations that arise from, are attributable to or are in connection with the same single occurrence, only one Retention being the largest applicable will apply to all Single Property Losses and Single Business Interruption Losses combined.’
‘In one respect, the language of the aggregation clause in the present Policy is even wider than that of the clauses considered in the Axa, Municipal Mutual and Countrywide cases. Not only does the clause in the Policy use the expression “originating cause or source”, but the description of the link required between the “originating cause or source” and the claims which it is sought to aggregate is worded in the broadest possible terms. … The phrase “in connection with” is extremely broad and indicates that it is not even necessary to show a direct causal relationship between the claims and the state of affairs identified as their “originating cause or source”, and that some form of connection between the claims and the unifying factor is all that is required.’
‘We agree that the origin of the outbreak of COVID-19 was China. We agree that the origin of the pandemic was in Wuhan, as suggested by virological analysis and also the epidemiological evidence …’
‘A large proportion of the initial cases in late December 2019 and early January 2020 had a direct link to the Huanan Wholesale Seafood Market in Wuhan City, where seafood, wild, and farmed animal species were sold. Many of the initial patients were either stall owners, market employees, or regular visitors to this market. Environmental samples taken from this market in December 2019 tested positive for SARS-CoV-2, further suggesting that the market in Wuhan City was the source of this outbreak or played a role in the initial amplification of the outbreak.’
‘It is, therefore, striking that the sequences of 2019-nCoV from different patients described here were almost identical, with greater than 99·9% sequence identity. This finding suggests that 2019-nCoV originated from one source within a very short period and was detected relatively rapidly.’
‘I wanted to bring everyone up to date with the national fight back against the new coronavirus and the decisions that we’ve just taken in COBR for the whole of the UK … now is the time for everyone to stop non-essential contact with others … you should avoid pubs, clubs, theatres and other such social venues …’
‘Members here will know that at the COBRA on Monday of this week the Welsh Government agreed with the other three national Governments across the UK to advise the public to take further extraordinary measures … we’ve also asked people across the wider population to reduce social contact. That includes …not going by choice into crowded areas such as pubs or restaurants …’
‘A decision or a plan cannot constitute an event or occurrence. It is the promulgation and application of the programme that might.’
‘… It would be wholly absurd to regard each State Department Advisory or similar warning by a competent authority as a separate occurrence for the purposes of the deductible. That would mean that if, for example, the Attorney General gave two separate Press conferences or Press briefings on the same day each reiterating the theme to which I have already referred it would be necessary either to attempt to distinguish between the two warnings in terms of their causal effect on bookings, which is obviously impossible, and/or to apply two deductibles possibly for no better reason than that there were two warnings notwithstanding it is impossible to attribute the deterioration in bookings to the one rather than to the other. The per occurrence deductible must also be read in the light of the maximum indemnity period of six months per event which is stipulated in the cover. At any rate in the context of and for the purposes of this claim it seems to me necessary here to equate occurrence with event. Where there are multiple warnings arising out of a single defining event, at any rate one of the magnitude of 11 September, it seems to me to accord with common sense and what the parties’ intention must have been to regard those warnings, or at any rate those within the immediate six months after the event where it is that six months in respect of which the claim is brought, as a single occurrence, since they all arise out of the same set of circumstances, both actual and threatened. Any other approach would be likely to render the cover unworkable, although it might not be too difficult … to attribute to reaction or response to the very first post 11 September warning … a very significant proportion of the overall negative impact on Silversea’s bookings felt within the ensuing six months.’
‘… that analysis simply does not apply because there were not two concurrent causes.’
‘If the subject matter of the insurance has already received its death blow when the risk expires, the fact that the damage has not yet reached such proportions as to make the ship or goods already an actual total loss cannot prevent the assured from claiming for an actual total loss when the work of destruction has been completed. Similarly, if the assured is deprived of possession or control of the insured property prior to the expiry of the risk by an insured peril, the fact that at the date when the policy expired it could not be said that the assured was irretrievably deprived of his ship or goods, or that their recovery was unlikely, will not prevent him from afterwards claiming for an actual total loss if as the result of a sequence of events following in the ordinary course upon the peril insured against the loss develops into an actual total loss.’
‘We are taking the first careful steps to modify our measures… And step three – at the earliest by July – and subject to all these conditions and further scientific advice: if and only if the numbers support it, we will hope to re-open at least some of the hospitality industry and other public places, provided they are safe and enforce social distancing…’
‘That means we must be very cautious and very careful where we proceed to from here … we must not squander our progress by easing up too soon …’
‘4. For Additional Increased Cost of Working (as defined in the Policy) (“AICW”) does the Sub-Limit provided by the Policy (£15 million ) apply in the aggregate or does the Sub-Limit apply for each SBIL? 5. Does AICW apply to economic Increased Cost of Working (as defined in the Policy) (“ICW”) or only to uneconomic ICW?’
‘It is in an insured’s interest to restore a business to normal trading conditions as quickly as possible after an incident and, moreover, there is a duty to do so imposed by the policy claims conditions. This, however, may involve considerable expense in undertaking special measures to reduce the loss of turnover during the indemnity period and to hasten the resumption of normal trading. But action on these lines is also of benefit to the insurers as its effect is to reduce the amount which would otherwise be payable for loss of gross profit. Therefore [a typical BI policy] compensates the insured for the additional expenditure necessarily and reasonably incurred for the sole purpose of avoiding or diminishing the reduction in turnover which would otherwise have taken place. No sum insured is stated in respect of this benefit nor is anything to be added to the amount insured on gross profit to provide for it because it is an alternative to loss which would otherwise be payable as loss of gross profit. An exception to this arises, however, when it is anticipated that the amount which may have to be expended on increase in cost of working in the event of a claim will exceed the amount of the gross profit which will be conserved by such expenditure. Specific insurance is then required in respect of the excess amount as described at para. 2.78.’
‘As the foregoing paragraphs have indicated there may be occasions where additional expenditure has been incurred as a result of an incident but may not be recoverable because it either does not meet the criteria to qualify as an increase in cost of working, or because the expenditure has not, or cannot be shown to have been economic. There may be occasions where there was good reason to incur such expenditure. To deal with that, an extension of cover termed “Additional Increase in Cost of Working” is available. As explained [above], under [a typical insurance of gross profit] a policyholder is indemnified … for additional expenditure necessarily and reasonably incurred to minimise or avoid altogether the potential loss of turnover. The amount provided for this is, however, limited to the sum which would otherwise have been payable for loss of gross profit had such additional expenditure not been incurred. In other words, the insurer will not pay in respect of additional expenditure more than £x per £x of gross profit saved. This limit is calculated by applying the rate of gross profit to the amount of the turnover that has been achieved as a result of the additional expenditure. Although this “economic limit” is normally sufficient to provide fully for an insured’s loss there are businesses in which the circumstances are such that it may be inadequate. Some insured (sic) must try to continue their production or services without a break whatever the cost to maintain what are public services. Others may wish to prevent competitors from gaining a foothold with their customers. Some will see continuation of supply as a reputational issue. In these two latter categories the difficulty lies in establishing whether the expenditure is protecting turnover within the maximum indemnity period, or whether it has a longer-term objective, when additional increase cost of working cover would be advisable. This additional cover is readily available, although some insurers may be reluctant to offer it if the maximum indemnity period on the gross profit items is less than 12 months. It provides an indemnity for additional expenditure beyond that recoverable [under a typical loss of gross profit cover] by means of a supplementary item under the heading on additional increase in cost of working.’
‘… Given that additional increase in cost of working cover is relatively inexpensive, most businesses would be wise to consider the additional cover that it provides. … … some businesses will rely on increase in cost of working cover only, i.e. with no cover for gross profit or gross revenue. Some policyholders or their advisers confuse increase in cost of working only, with additional increase in cost of working (which sits alongside gross revenue or gross profit cover) and it is not unknown for cover to be granted on this latter basis alone. This is to be regretted because the additional increase in cost of working cover is all but useless in the absence of cover for increase in cost of working, since the former will only cover the uneconomic element of additional expenditure, leaving the insured to bear the economic element. …’ [Para. 11.23] ‘… additional increase in cost of working provides cover for that element of any additional expenditure which does not meet the test of the economic limit. Likewise, additional increase in cost of working cover will not pick up the economic element of any additional expenditure, i.e. the two covers are effectively mutually exclusive…. … From the underwriter’s perspective, the premium differential is significant between gross profit and additional increase in cost of working, so again it is unlikely to be their intention that underinsurance [of gross profit] could be bought back cheaply.’
‘… furlough receipts will not be netted off the wage expense under UK Generally Accepted Accounting Principles (GAAP) but will be shown in annual accounts as “other income”, whereas US GAAP, which might be followed for UK subsidiaries of US companies, would allow the offset of furlough receipts from the wage expense (neither US GAAP nor International Financial Reporting Standards are prescriptive of the treatment of such receipts).’
‘In order to give my opinion upon this case, I feel obliged to revert to the foundation of every rule which has been promulgated and acted upon by the Courts with regard to insurance law. The very foundation, in my opinion, of every rule which has been applied to insurance law is this, namely that the contract of insurance contained in a marine or fire policy is a contract of indemnity, and of indemnity only, and that this contract means that the assured, in case of a loss against which the policy has been made, shall be fully indemnified, but shall never be more than fully indemnified. That is the fundamental principle of insurance, and if ever a proposition is brought forward which is at variance with it, that is to say, which either will prevent the assured from obtaining a full indemnity, or which will give to the assured more than a full indemnity, that proposition must certainly be wrong.’
‘Although the defendants’ construction stretches the word “payable” somewhat, it seems to me that it is to be preferred to Synergy’s construction, which leaves the saving in respect of depreciation out of account. My principal reason for that conclusion is that it seems to me that, as a matter of principle, a policy should be interpreted as providing an indemnity for the loss suffered not for more than such an indemnity. Of course if the wording is incapable of any other construction, a court might be driven to the conclusion that something in excess of a full indemnity was intended, but given the unlikelihood and unreasonableness of such a conclusion, the court should not arrive at it unless no other conclusion is possible.’
‘that no compensation is to be given by the commissioners on account of loss which has been insured against or covered by insurance, and secondly that underwriters are not to receive any benefit from the funds distributed under the Act, and that the compensation given to any claimant must be given to compensate him for any loss either from want of insurance or from being under-insured.’
‘Here it is admitted that there is in the Act of Congress everything said and done which a supreme legislature could possibly say or do for the purpose of excluding the present claim and attributing that fund which has been appropriated in this case to the sufferers by the capture, not to the valued but to the unvalued part of the loss. That distinction, which in my opinion does exclude for this purpose the part covered by the valuation of the policy of insurance, is made by the Act of Congress. It was a true and bona fide valuation but it did not cover the actual loss. The fund awarded by the Act of Congress of the United States is only for that part of the actual loss which the valuation did not cover and which the insurers have not paid.’
‘I think that that gift being made, as it was made, for the benefit of those who had suffered from the captures, and the money being paid for that purpose, it did diminish the loss; and consequently the benefit of it enured to the persons who were bound to indemnify … It was not because the King was bound to pay the money – he was not … It was because de facto there was a payment which prevented, or diminished pro tanto, the loss against which the insurers were bound to indemnify the assured.’
‘Is [subrogation] to be limited to this, that the underwriter is subrogated into the place of the assured so far as to enable the underwriter to enforce a contract, or to enforce a right of action? Why is it to be limited to that, if when it is limited to that, it will, in certain cases, enable the assured to recover more than a full indemnity? … Now it seems to me that in order to carry out the fundamental rule of insurance law, this doctrine of subrogation must be carried to the extent which I am now about to endeavour to express, namely, that as between the underwriter and the assured the underwriter is entitled to the advantage of every right of the assured, whether such right consists in contract, fulfilled or unfulfilled, or in remedy for tort capable of being insisted on or already insisted on, or in any other right, whether by way of condition or otherwise, legal or equitable, which can be, or has been exercised or accrued, and whether such right could or could not be enforced by the insurer in the name of the assured by the exercise or acquiring of which right or condition the loss against which the assured is insured, can be, or has been diminished.’
‘I think that the question turns on the consideration of what a policy of insurance against fire is, and on that the right of the plaintiff depends. The policy is really a contract to indemnify the person insured for the loss which he has sustained in consequence of the peril insured against which has happened, and from that it follows, of course, that as it is only a contract of indemnity, it is only to pay that loss which the assured may have sustained by reason of the fire which has occurred. In order to ascertain what that loss is, everything must be taken into account which is received by and comes to the hand of the assured, and which diminishes that loss.’
‘The question of whether the Transvaal Government, in returning this money, were thinking of the insurers appears to me to be immaterial, if they imposed no condition or trust or obligation upon the money as between themselves and the defendants when it was returned. Probably the Transvaal Government were not thinking of the insurers at all. But on the facts I have stated, it appears to me that the money having come back as part of the commandeered gold, so as to diminish the loss, in the absence of circumstances negativing that view, the insurers would be able to say: “We are entitled to avail ourselves of that diminution of the loss which we insured against.”’
‘It follows inexorably that the payment was made solely for the benefit of the assured and not for the benefit of the reinsurer.’
‘In Burnand v Rodocanachi, as the judgments show, the critical factor was the clearly expressed intention of the US Congress to compensate the beneficiaries for their uninsured losses, together with the express exclusion of any claim by the insurers in their own right or that of the assured. In Merrett’s case the findings of fact by the arbitrators led inexorably, as Mr Justice Steyn held, to a conclusion in conformity with Burnand v Rodocanachi. In Castellain v Preston, on the other hand, no such intention to exclude the insurers could be derived from the purchaser’s payment of the purchase price without abatement on account of the fire damage.’
‘In both Burnand v Rodocanachi and Merrett v Capitol Indemnity, as also in the example of the brother’s gift given by Bowen LJ in Castellain v Preston, it is possible to see that the payment was not intended to make good the loss against which the underwriters were obliged to indemnify the insured. The settlement payment in Colonia Versicherung AG v Amoco Oil Co can be seen to fall on the other side of the line. In the present case there is nothing to suggest that Sembawang carried out the repairs to the vessel with any intention other than to complete the work under contract and obtain payment of the price. In those circumstances it is impossible in my view to say that Sembawang did not intend to make good the loss in respect of which CPL was entitled to claim on the insurers. … by the time a claim was made CPL had not incurred a loss that could be recovered from the insurers.’