Court backs insurers over Pizza Express in latest round of BII cases

UK restaurant chain Pizza Express has lost an important preliminary ruling in the latest round of business interruption insurance disputes relating to closures during the Covid-19 pandemic. In the first few months of the pandemic, insurers and business policyholders clashed over BII, which some insurers claimed should not apply to pandemics. The case was fast-tracked though the courts in January 2022 and it was decided mostly in the favour of the regulator and policyholders. At the time, it was hailed as one of the most important insurance test cases in decades. While it addressed a large number of issues, insurers and policyholders are still seeking guidance on some points. One of them is an “at the premises” or ATP clause of some BII policies. This clause triggers the indemnity if there is an incident on the premises of the insured’s business. Test cases seeking clarification are currently being brought against various insurers by claimants, including Pizza Express and conference centre owner London International Exhibition Centre, which runs ExCeL London. The various issues are being systematically case managed with hearings and rulings on specific points scheduled across the legal year. The issue at the heart of today’s ruling is the extent of the sub policy limits and is brought by Pizza Express against Liberty Mutual Insurance and XL Insurance Company. Pizza Express argues that the wording of the policy means it can claim for “any one Incident”. The insurers say that Pizza Express can claim for “any one occurrence”. Many millions of pounds hang on the distinction. The insurers argument limits the number of claims to three at most, based on the three main periods of public health restrictions, or one if the pandemic is taken as one occurrence. This, say the insurers, will limit Pizza Express’s claim to around £260,000 per occurrence. Pizza Express’s interpretation would allow them to claim for ‘incidents’ across the company’s 475-restaurant national business. They are claiming as much as £178m. In his ruling handed down today High Court judge Mr Justice Jacobs considered the wording of the policy and backed the insurers, thus significantly reducing the potential value of Pizza Express’s claim. “The answer to the sub-limits preliminary issue is clear and is resolved in favour of the Insurers. The sub-limits apply ‘any one occurrence’ unless otherwise stated,” he said in his ruling. There are still many arguments to be had. Pizza Express could attempt to appeal today’s ruling. In addition, there are at least five other similar sets of live proceedings. In October the courts will look at “prevention of access” aspects of the cover, which is another point that could drastically alter the value of the claims. (1) Pizzaexpress Group Limited (2) Pizzaexpress (Restaurants) Limited (3) Bookcash Trading Limited (4) Agenbite Limited (5) Pizza Express (Jersey) Limited v (1) Liberty Mutual Insurance Europe Se (2) XL Insurance Company Se Commercial Court (Mr Justice Jacobs) 26 May 2023 Photo © Maureen McLean/Shutterstock