HFW : COVID-19 Bi Losses: English High Court confirms loss of use is not equivalent to physical loss of property
The recent judgment in the FCA business interruption test case ruled on the interpretation of notifiable disease and non-damage prevention of access extensions under BI policies. However, one issue that the test case did not consider was coverage of COVID-19 BI losses under the principal BI insuring clause (which typically provides cover for BI arising out of “damage” to insured property).
Accordingly, although the FCA had not sought to argue that COVID-19 constitutes or creates physical property “damage” under English law, it remained open to other insureds to do so. However, the decision in TKC London Limited v Allianz Insurance Plc( EWHC 2710 (Comm)), handed down on 15 October, appears to confirm the difficulties for insureds seeking to conflate COVID-19 with physical damage.