Insurers Covéa and Markel have won against reinsurers in their respective COVID-19 business interruption disputes in the UK.

Given the “substantial overlap” between the issues and the matters relevant to their determination in the two separate appeals – UnipolRe was appealing against Covéa; General Reinsurance against Markel – Mr Justice Foxton produced a single judgment, with the insurers emerging triumphant.

In the court document seen by Insurance Business, Mr Justice Foxton said: “It was common ground in both appeals that direct business written in an insurer’s property account now gives protection against business interruption (BI) even when that interruption is not consequential upon damage to the insured’s property – the so-called ‘non-damage BI’ cover…

“UnipolRe and General Reinsurance advanced a number of similar arguments as to why there had been no catastrophe for the purposes of the Covéa and Markel reinsurances respectively, although presented in different ‘batting orders’.”

The reinsurers’ appeals against the conclusions of the arbitration awards that there had been a catastrophe for the purposes of the relevant reinsurances were dismissed. Additionally, Markel was successful in overturning a finding in its arbitration.

“I allow Markel’s appeal against the conclusion of the Markel tribunal as to the operation of the ‘hours clause’ in the Markel reinsurance,” Mr Justice Foxton said.

“As the Covéa tribunal noted, the ‘hours clause’ defines ‘the extent and duration of a loss occurrence’ (or in the Markel reinsurance, ‘the duration and extent of any event’), not the duration of an ‘individual loss’,” Mr Justice Foxton said earlier in his 61-page ruling.

Markel contended that the “hours clause” periods were concerned with the duration of the catastrophe that caused the individual losses and not the individual losses themselves.

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