“each and every loss, any one risk, or each and every loss or series of losses arising out of one event”
“It is agreed that “Any One Event” is to mean any one Conference or Exhibition or convention or any other “Event” accepted by the Reinsured including the period of installation or dismantling and arrangements directly connected with the “Event”.”
“… 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. Evidence about what the parties subjectively intended or understood the contract to mean is not relevant to the court’s task.”
“11… Interpretation is, as Lord Clarke stated in Rainy Sky (para 21), a unitary exercise; where there are rival meanings, the court can give weight to the implications of rival constructions by reaching a view as to which construction is more consistent with business common sense. But, in striking a balance between the indications given by the language and the implications of the competing constructions the court must consider the quality of drafting of the clause… 12. This unitary exercise involves an iterative process by which each suggested interpretation is checked against the provisions of the contract and its commercial consequences are investigated:…once one has read the language in dispute and the relevant parts of the contract that provide its context, it does not matter whether the more detailed analysis commences with the factual background and the implications of rival constructions or a close examination of the relevant language in the contract, so long as the court balances the indications given by each. 13. Textualism and contextualism are not conflicting paradigms in a battle for exclusive occupation of the field of contractual interpretation. Rather, the lawyer and the judge, when interpreting any contract, can use them as tools to ascertain the objective meaning of the language which the parties have chosen to express their agreement. The extent to which each tool will assist the court in its task will vary according to the circumstances of the particular agreement or agreements.”
“64. The unitary exercise of interpreting the contract requires the court to consider the commercial consequences of competing constructions, but as Lord Neuberger said in Arnold v Britton at paras 19 to 20, commercial common sense should not be invoked retrospectively, or to rewrite a contract in an attempt to assist an unwise party, or to penalise an astute party. Where the parties have used unambiguous language, the court should apply it: Rainy Sky at para 23.”
“118. …First the important background context known to the parties includes the fact that “any one event” is a classic term for aggregation of losses by reference to the cause of the losses. The absence of any wording in the Retained Liability clause of any words of causation, such as “arising out of”, does not undermine the potency of this starting point. In Kuwait Airways v Kuwait Insurance Co. Rix J was concerned with a clause which provided for aggregation “any one occurrence, any one location” which he treated as posing the question as to whether the circumstances of the losses involved “such a degree of unity as to justify their being described as, or arising out of, one occurrence” (my emphasis). Occurrence is usually to be treated as synonymous with event.”
“121. This is to put more weight on this clause than it will bear. It is clear that it owes its origins to aggregation provisions in catastrophe excess of loss reinsurance where the insured peril is the catastrophe, and has been transposed into this policy without any care as to its language. Thus although it purports to apply for the purposes of the Retained Liability clause it provides for something to be deemed to be a single event “and therefore an occurrence” although “occurrence” forms no part of the wording of the Retained Liability clause. It applies not only to damage but “liability for damage” which does not apply to this property damage cover in which it is difficult to see how a liability could be an event. The enumerated causes are not obviously translatable to a deductible which only applies where a different proximate cause applies namely defective design, although in theory some at least might be capable of having application as concurrent proximate causes… All this suggests that the 72-hour clause cannot provide any weighty counterbalance to the natural construction of the Retained Liability clause which is that “event” looks to the cause of the loss not the loss itself when the cause of the loss is defective design, for the reasons I have identified.”
“I think, my Lords, that the argument from redundancy is seldom an entirely secure one. The fact is that even in legal documents (or, some might say, especially in legal documents) people often use superfluous words. Sometimes the draftsmanship is clumsy; more often the cause is a lawyer’s desire to be certain that every conceivable point has been covered. One has only to read the covenants in a traditional lease to realise that draftsmen lack inhibition about using too many words. I have no wish to add to the anthology of adverse comments on the drafting of the J.C.T. Standard Form Contract. In the case of a contract which has been periodically renegotiated, amended and added to over many years, it is unreasonable to expect that there will be no redundancies or loose ends. It is therefore necessary to make a careful examination of the contract as a whole in order to discover whether upon its true construction it does confer binding power upon the decisions of the architect or whether there is some other explanation for the "open up, review and revise" power in clause 41.4.”
“44. I accept that, in broad terms and with appropriate regard for the limitations on the weight which can be placed on it, the history of a particular market wording, and the events which led to its introduction and modification, do form part of the admissible factual matrix, at least where the contract was entered into by market participants and the materials are reasonably available to the parties (whether they chose to avail themselves of them or not). There is strong academic support for a difference of approach between the admissibility of material of this kind when construing market standard forms on the one hand, and bespoke contracts on the other (see Professor Louise Gullifer KC (Hon), “Interpretation of Market Standard Form Contracts” (2021) JBL 227, pages 236 to 238). A number of decisions of the English courts have had regard to material of this kind when resolving disputed issues of construction…”
“65. There may be certain cases, however, where the background and context drive a court to the conclusion that “something must have gone wrong with the language”: Chartbrook Ltd v Persimmon Homes Ltd[2009] AC 1101 at para 14 (Lord Hoffmann); Investors Compensation Scheme Ltd v West Bromwich Building Society[1998] 1 WLR 896 at page 913 (Lord Hoffmann). A “strong case” is required because courts do not easily accept that people have made linguistic mistakes in formal documents (Chartbrook at para 15). But if it is clear that something has gone wrong with the language, the court can interpret the agreement in context to “get as close as possible” to the meaning which the parties intended: Chartbrook at para 23, citing KPMG LLP v Network Rail Infrastructure Ltd [2007] Bus LR 1336 at page 1351 (Carnwath LJ). This is part of the construction exercise, as opposed to a separate process of correcting mistakes, or a summary version of rectification: Chartbrook at para 23. Nonetheless, there are certain limits to the exercise. First, there must be a clear mistake in the language or syntax in the contract, as distinct from the bargain itself: Honda Motor Europe Ltd v Powell[2014] EWCA Civ 437 at para 37 (Lewison LJ). Secondly, the court can only adopt this approach if it is clear what correction should be made: Arnold v Britton at para 78 (Lord Hodge).”
“24 The second qualification concerns the words “on the face of the instrument”
“It is not necessary before the Court can correct a mistake under the Chartbrook principle that the Court should be satisfied how the mistake happened, and, since, unlike in an action for rectification, evidence as to the drafting process will almost always be inadmissible (as Fancourt J correctly held it was here), it will often be impossible to know. But the fact that there is a plausible explanation as to how the error occurred can support the conclusion that there has indeed been such an error: see for example Homburg Houtimport BV v Agrosin Private Ltd (The Starsin)[2003] UKHL 12 at [22]-[23]…”
“… In general, the higher the layer of reinsurance the more serious, and the less common, will be the event that impacts that cover. Low layers of cover are sometimes referred to as “working layers”
“A. Fine Arts, Jewellers Block and General Specie B. Contingency C. Political Risks D. Accident E. Engineering and Construction, and F. Political Violence”
“Contingency: All Business allocated by the Reinsured to their Contingency Account, including but not limited to Event Cancellation, Non-Appearance, Confidential Life (including the ASU Critical Asset Protection Cover) Trade Name Restoration, Failure to Survive and Mathematical Prize Indemnity and Film Package (being Film Producers Indemnity, Negative, Props, Set and Wardrobe Equipment).”
“Layers 1, 2 and 3 The definition of what constitutes a 'risk' shall follow the definition applicable to the Class of Business affected If/as appropriate.”
“ULTIMATE NET LOSS A. The term "Ultimate Net Loss" shall mean the sum actually paid by the Reinsured in settlement of losses or liability (including the amount of any Extra Contractual Obligations or Loss in Excess of Policy Limits as defined In the Extra Contractual Obligations and Excess Limits Liability clause) after making deductions for all recoveries, all salvages and all claims upon other reinsurances whether collected or not and shall include all Loss Adjustment Expenses arising from the settlement of claims.”
“B. Contingency: USD or CAD or EUR4,250,000 …each and every loss or series of losses, any one Risk, or any one Event. EXCESS OF USD or CAD or EUR750,000…each and every loss or series of losses, any one Risk, or any one Event. Unlimited Reinstatements without additional premium, or so deemed. Maximum amount recoverable in respect of all losses arising out of one Event USD or CAD or EUR4,250,000 …”
“NOW THIS AGREEMENT shall pay up to: USD or CAD or EUR20,000,000…in the aggregate Ultimate Net Loss in excess of USD or CAD or EUR5,000,000…in the aggregate Ultimate Net Loss. Notwithstanding the foregoing, only Qualifying Losses may contribute to the aggregate deductible and limit hereon. Notwithstanding the limits of the Qualifying Losses, this Agreement shall be subject to a limitation as to the amount of those losses contributing to the Ultimate Net Loss hereon where such losses emanate from a single "loss occurrence" which affects more than one of the Qualifying Reinsurances. In such circumstances, the contribution of the Qualifying Loss towards the Ultimate Net Loss hereon shall be limited to USD or CAD or EUR2,500,000….”
“Ultimate Net Loss each and every loss, any one risk, or each and every loss or series of losses arising out of one event”
“Multi Class Large Risk / Catastrophe Excess of Loss”, the heading for Layer 2 was the same, under the heading for Layer 3 was simply “Multi Class Catastrophe Excess of Loss”
“4) Risk versus cat / clash 'direction of collections'. It is the intention of this programme that any loss involving multiple risks or policies occurring wholly within one single defined class from one event will be collectable from the vertical programme and will not be presented to the aggregate risk excess section. For example a PA cat loss involving 5 lives of$2.5m ($12.5m event) would be collected as$7.5m xs 5m rather than take 5 times$1.5m xs 1m from the PA qualifying specific layer.”
“16. As explained above, in 2015, WRB asked JLT to help them bring their separate individual reinsurance treaties together into a single multi-class programme comprising the Aggregate Treaty and the Excess of Loss Treaty. 17. JLT worked with WRB to draft the Aggregate Treaty first and then the Excess of Loss Treaty. The Aggregate Treaty was the starting point. 18. I mainly worked with Scott Campbell at WRB in preparing the Aggregate Treaty. 19. WRB provided JLT with the slip wordings for its existing class specific reinsurance treaties for the purposes of drafting the Aggregate and Excess of Loss Treaties and I recall that I spent a considerable amount of time working with Scott Campbell and Tracey Vizzo (in particular) bringing the individual treaty wordings together. 20. Once a first draft of the Aggregate Treaty had been prepared, I and others at JLT worked with WRB to prepare the wording for the Excess of Loss Treaty. The wording of the latter was based on the former: as the two treaties were to work together as a single programme, covering the same classes of business, the wording of the Excess of Loss Treaty followed that of the Aggregate Treaty incorporating many of the same terms, language and definitions… 71. This definition of "Any One Event" and (subject to some amendments over time largely to reflect changes in the underlying business and particular reinsurance arrangements) the rest of the definitions within this section relevant to other classes of business, were included in the wording of the 2015 Aggregate Treaty, the preparation of which I describe at paragraphs 9-15 above. As explained above, the wording for the 2015 Excess of Loss Treaty was prepared after the Aggregate Treaty and incorporated many of the same terms, including the Definitions section reflecting the fact that the two treaties were to work together as a single multi-class reinsurance programme. Subject to some changes to particular definitions over time, the same Definitions section was then included in both the Aggregate and Excess Treaties for each of 2016 and 2017 and remained in the Excess of Loss Treaty for 2018 and 2019 when the Aggregate Treaty fell away. 72. I do not recall it ever being suggested to me, whether by WRB or any of the reinsurers during discussions which I had with them around the placement of the Excess of Loss Treaty during the years 2015 to 2019, that for the purposes of applying the limits of the Excess of Loss Treaty, "event" as used in the formulation "each and every loss, any one risk, or each and every loss or series of losses arising out of one event" should be taken to mean the same as "Any One Event" as defined above, i.e. "one Conference or Exhibition or Convention or any other "Event" accepted by the Reinsured." Instead, and as described above, the Submission Documents for each year, and all discussions I recall having with both WRB and the reinsurers, proceeded on basis that the Excess of Loss Treaty provided a "tower" of cover (and the limits applied) in respect of both large individual risks (at least at the lower layers) and multiple losses arising from the same causative event or occurrence, including catastrophic events such as windstorms, earthquakes or floods. I certainly do not recall it being suggested by any reinsurer that the Excess of Loss Treaty limits were to apply to Contingency losses in a manner different to this, or to the manner in which they were to apply to losses from other classes of business. If that had been the case, this would no doubt have been explained in the various diagrams and explanatory documents to which I refer above and discussed in emails. By way of example, it would have been obvious for Simon Bird of Brit to have raised that the excess layers did not cover Contingency losses on a cat basis if he had thought that to be the case, in the same way that he had flagged in an email dated15 March 2018 that the lower layers did not cover Political Risk. I do not recall Brit, or any other reinsurer, doing so.”
“…Please find attached the draft aggregate slip. There are a few more minor points the syndicate would like to address but this version is fairly close to the final product. The excess slip is close behind and will follow the aggregate slip where applicable…”
“16. On the left side of the schematic, each of "Marine and fine art", "Contingency/A&H" and "Political violence and Political risk", are shown as protected by a tower of cover, in three layers making up USD75m excess of a retention of USD5m. 17. On the right side of the schematic, the boxes provide details of the limits applicable to each layer and the amounts that can be recovered in different scenarios. For the first two layers, this includes both a "max any one event per tower" limit and a "max any one event" limit. The former describes the limit applicable to losses within an individual tower arising from the same causative event and the latter describes the limit applicable where there is a "clash" loss involving multiple classes of business in more than one tower arising from the same causative event. As shown in the schematic above, this latter "per event" limit would mean that if the same event were to cause losses in all three towers, WRB would not get the benefit of the full value of each layer from all three towers, which would be USD60m in the first layer and USD75m in the second layer, as its "per event" cover would be capped at USD40m in the first layer and USD50m in the second layer… 19. At the foot of the above schematic, on the left, is the statement "Interlock applies. Maximum retention any one event 5,000,000." This again refers to the situation where there is a clash involving classes of business in separate towers, for example Contingency (tower B) and Marine (tower A), and losses are suffered in both towers, as a result of the same causative event. In that situation, the schematic shows that you interlock the USD5m deductible, such that a single deductible applies to the combined losses but is allocated proportionately between the losses in each tower… 21. The above schematic therefore shows the Excess of Loss Treaty providing three vertical towers of cover, across multiple classes of business, in respect of multiple losses arising from a single causative event, such as a natural catastrophe. In contrast, the schematic for the Aggregate Treaty states that it is "subject to an in-all event limit of USD2.5m any one event for losses involving more than one line of business", such that the Aggregate Treaty is shown as picking up individual losses of up to USD5m over the course of the year, but not (at least beyond USD2.5m) clash losses, where the same event causes multiple losses.”
“Note your comment, as you will appreciate we are following the client's standard language, and while it could be made slightly clearer, we believe the intention is well enough understood and would not affect the operation.”
“…• The loss history of the accounts covered have been good in recent years and have again performed well in 2017 against a back drop of the HIM losses. Hurricane Irma was the largest loss at$3.6m FGU with the majority of this coming from a single cancellation loss in the Contingency arena. • As expected with income reductions exposure has fallen sharply on the on an event basis (circa 25%) as illustrated in the catastrophe modelling and RDS exhibits. Risk exposure has followed in the same direction, please note that the C&E profile is shown gross before QS for this year although there is only exposure above$15m due to the inuring QS.”
“..Catastrophe modelling results down circa 25% which has a considerable bearing on the higher layers where this would be the majority of the exposure • Per risk exposure down circa 5% with expectations of further reductions to match the premium income reductions…” • Per risk exposure down circa 5% with expectations of further reductions to match the premium income reductions…”
“WRB’s primary case is that in each of the seven jurisdictions there was a single aggregating event from which all of the Contingency Losses in that jurisdiction arose. As to what the relevant single event in each jurisdiction was, WRB advances its case on a number of alternative bases: (a) That the aggregating event was the announcement and/or introduction over a limited period of time of a combination of measures whose collective impact was (amongst other things) to prevent or restrict large gatherings from taking place. (b) Alternatively, where relevant (this applies only with respect to California, Illinois, Nevada, New York and England), that the aggregating event was the announcement and/or introduction over a limited period of time of a narrower combination of measures which expressly recommended or imposed restrictions on gatherings. (c) In the further alternative, that the aggregating event was the announcement and/or introduction of a specific single measure which recommended or imposed restrictions on gatherings. In all jurisdictions save Colorado and Florida there are two or more possible candidates for the relevant single measure, on which WRB relies in the alternative. (d) In the final alternative, if the court were to conclude that none of the particular combinations of measures, or individual measures, identified by WRB constituted the relevant aggregating event, it would still be open to the court to find that some other combination or single measure (out of the pleaded measures) did so.”
“31. The single aggregating event from which the Contingency Losses in California arose was: (1) The announcement and/or introduction from4th March 2020 to16th March 2020 , of the following combination of measures, the collective impact of which was (among other things) to prevent or restrict large gatherings from taking place in California: (a) On4th March 2020 , the Governor of California proclaimed a state of emergency to exist in California. (b) On11th March 2020 , the Governor of California recommended that gatherings of more than 250 persons should be postponed and that smaller gatherings could proceed only on the basis of 6 feet of social distancing. (c) On16th March 2020 , the California Department of Public Health (“the California DPH”) ordered all gatherings should be postponed or cancelled. (2) Alternatively, the announcement and/or introduction, from11th March 2020 to16th March 2020 of the following combination of measures, which expressly recommended or imposed restrictions on gatherings in California: (a) The11th March 2020 recommendations of the Governor of California (referred to at para. 31(1)(b) above). (b) The16th March 2020 order of the California DPH (referred to at para.31(1)(c) above). (3) Alternatively, the announcement and/or introduction of the11th March 2020 recommendations of the Governor of California (referred to at para. 31(1)(b) above). (4) Alternatively, the announcement and/or introduction of the16th March 2020 order of the California DPH (referred to at para. 31(1)(c) above). (5) Alternatively, the announcement and/or introduction within California of such measure(s) or combination of measures referred to above, the announcement and/or introduction of which the Court determines constitutes the aggregating event. 32. For the avoidance of any doubt, the Claimant will say that the causative effect on large gatherings of the aforesaid combinations of measures or particular measures remained materially unchanged during the period when the Contingency Losses in California occurred.” (a) On4th March 2020 , the Governor of California proclaimed a state of emergency to exist in California. (b) On11th March 2020 , the Governor of California recommended that gatherings of more than 250 persons should be postponed and that smaller gatherings could proceed only on the basis of 6 feet of social distancing. (c) On16th March 2020 , the California Department of Public Health (“the California DPH”) ordered all gatherings should be postponed or cancelled. (a) The11th March 2020 recommendations of the Governor of California (referred to at para. 31(1)(b) above). (b) The16th March 2020 order of the California DPH (referred to at para.31(1)(c) above). gatherings of the aforesaid combinations of measures or particular measures remained materially unchanged during the period when the Contingency Losses in California occurred.”
“…all Business Interruption Loss and Business Interruption Costs & Expenses (excluding Additional Increased Cost of Working, Claims Preparation Costs, Public Relations Crisis Management Costs and Rewards Costs) and any amounts payable under Extensions that arise from, are attributable to or are in connection with a single occurrence …”
“186. In my view, there was not here a single occurrence, but a number of occurrences albeit in quick succession. In arguing that there was one occurrence, Stonegate Insurers placed particular reliance on the decision at first instance in IF P&C Insurance Ltd v Silversea Cruises Ltd(The Silver Cloud) [2004] Lloyd’s Rep IR 217. In that case, on a point which was not appealed, Tomlinson J held that multiple State Department Advisories or similar warnings at different times after the 9/11 attacks, over a period of six months or more, constituted a single occurrence for the purposes of a deductible provision in a business interruption insurance policy taken out by owners and operators of ultra-luxury cruise ships. He reasoned as follows (para 66): “… 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.” 187. The Silversea case dealt with facts significantly different from the present. In that case there were repeated but consistent warnings given in response to a single event. In the present case, there were a number of measures of increasing severity taken in response to the evolving situation in the pandemic. They were matters which had an individual importance in their own right that specific Advisories in the Silversea case did not. I would accept that questions such as the difficulty of deciding between the causal effect of two matters can be relevant to an assessment of whether, viewed from the correct perspective, they constitute one or two occurrences, but I would not accept that there is any general principle that, simply because there will be that difficulty, there must be one occurrence. Difficult questions of attribution of losses to different causes frequently arise in the adjustment of insurance claims.” “… 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.”
“192. For the purposes of completeness, I should make three matters clear. The first is that it may be that many losses which might be said to arise from, be attributable to or to be connected with the20 March 2020 occurrence which I have found also arose from, were attributable to or were connected with the16 March 2020 occurrence. In that case, all those losses will form part of a SBIL by reference to the16 March 2020 occurrence.”
“86. Fourthly, I do not consider that an informed observer would have regarded announcements or measures which simply continued existing restrictions or made trivial changes as being separate “single occurrences” for the purposes of the SBIL definition. I do not believe that it conforms to the parties’ intentions to have aggregation by reference to such matters, which effectively continued a status quo rather than marking any significant change to it. Nor would I consider that an informed observer would have regarded changes which simply reduced restrictions as being separate “single occurrences” for the purposes of the definition. They were such as would of their nature be expected to reduce losses not to lead to them and thus would not constitute the type of matter which would sensibly be regarded as a factor unifying different losses.”
“92. I am prepared to accept that, if an informed observer would readily have recognised that it would be impossible to distinguish losses caused by two or more announcements or regulations, she might not regard there as being two “single occurrences”
“… (i) something that can be called an ‘event’; (ii) the function of that event as being prior to the aggregated losses; (iii) a causative link between losses and event, undefined other than being looser than proximate cause; and (iv) the absence of remoteness. To which of course can be added the underlying concept of aggregation itself, that of a single unifying event.”