TKC London Ltd v Allianz Insurance PLC [2020] EWHC 2710 (Comm) (15 October 2020)

TKC London Ltd v Allianz Insurance PLC [2020] EWHC 2710 (Comm) (15 October 2020)

The policy does not respond to business interruption losses caused by enforced closure due to COVID-19 regulations in the absence of physical loss or damage to property. Temporary loss of use or regulatory closure does not constitute 'accidental loss or destruction of or damage to property' as required by the policy. Deterioration of stock due to closure is excluded as inherent vice or gradual deterioration. The material damage proviso is not satisfied as no payment or admission of liability has been made under a property policy. Accordingly, the claim is misconceived and bound to fail.

Citation
[2020] EWHC 2710 (Comm)
Parties
Claimant: TKC London Limited; Defendant: Allianz Insurance Plc
Jurisdiction
England and Wales
Judgment Date
15 October 2020
Procedural Posture
Commercial Insurance Claim (business Interruption) / Summary Judgment/strike Out Application
Outcome
Summary judgment for the defendant; claim struck out.
Legal Topics
Business Interruption Insurance, Policy Interpretation, COVID 19 Business Closure, Property Damage, Causation in Insurance Claims
Insurance Law Contract Law Business Interruption Insurance Policy Interpretation COVID 19 Business Closure Property Damage Causation in Insurance Claims

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Parties

TKC London Limited

Claimant

Allianz Insurance Plc

Defendant

Procedural Posture

Commercial Insurance Claim (business Interruption) / Summary Judgment/strike Out Application

Legal Issues

  1. 1 Whether enforced closure due to COVID-19 regulations constitutes 'accidental loss or destruction of or damage to property' under the policy
  2. 2 Whether business interruption losses are covered absent physical damage to property
  3. 3 Whether deterioration of stock due to closure is covered under the policy

Ratio Decidendi

The policy does not respond to business interruption losses caused by enforced closure due to COVID-19 regulations in the absence of physical loss or damage to property. Temporary loss of use or regulatory closure does not constitute 'accidental loss or destruction of or damage to property' as required by the policy. Deterioration of stock due to closure is excluded as inherent vice or gradual deterioration. The material damage proviso is not satisfied as no payment or admission of liability has been made under a property policy. Accordingly, the claim is misconceived and bound to fail.

Court Disposition

Summary judgment for the defendant; claim struck out.

Orders

  • Claim Form and Particulars of Claim struck out under CPR 3.4(2).
  • Summary judgment entered for Allianz Insurance Plc under CPR 24.2.