Unipolsai Assicurazioni SpA v Covea Insurance PLC
[2024] EWHC 253 (Comm)
Unipolsai Assicurazioni Spa v Covéa Insurance PLC
30 September 2024
[2024] EWCA Civ 1110
Court of Appeal
A reinsurer argued that the Covid-19 pandemic wasn't a 'catastrophe' covered by their contract and that payouts should be limited by a time constraint. The court disagreed, saying the pandemic clearly was a catastrophe and the time constraint applied to when the losses started, not how long they lasted. The court considered how this type of insurance usually works and the common understanding of the words used in the contract.
Key Facts
- •UnipolSai Assicurazioni Spa (Unipol) appealed Foxton J's dismissal of its section 69 Arbitration Act 1996 appeal against an arbitration award in favour of Covéa Insurance PLC (Covéa).
- •The dispute concerned business interruption losses caused by Covid-19 under a Property Catastrophe Excess of Loss Reinsurance.
- •Key issues were whether Covid-19 losses constituted 'one catastrophe' and whether the 'Hours Clause' limited indemnity to losses within 168 consecutive hours.
- •The arbitration tribunal found the Covid-19 outbreak was a catastrophe and rejected Unipol's argument that the Hours Clause limited recovery to losses within the 168-hour period.
Legal Principles
Contract interpretation is objective; a reasonable person's understanding of the contract language, considering available background knowledge, prevails.
FCA v Arch Insurance (UK) Ltd
Subjective intentions of parties are irrelevant to contract construction.
FCA v Arch Insurance (UK) Ltd
In determining 'occurrence', consider the matter from an informed observer's perspective.
Stonegate Pub Company Limited v MS Amlin
Market history and wording can inform interpretation if the parties are market participants and materials are reasonably available.
Various Cases cited in [44]
In aggregation disputes, 'unities' (time, place, way) are an aid to determining sufficient unity to satisfy contractual requirements.
Simmonds v Gammell
Section 69 appeal concerns errors of law, not factual findings.
Various Eateries; Simmonds v Gammell
Outcomes
Unipol's appeal dismissed.
The Court found the judge's conclusions were correct. The Covid-19 outbreak constituted a 'catastrophe' under ordinary language and the contractual context of the reinsurance. The 'Hours Clause' was interpreted to apply to the commencement of individual losses, not their duration, aligning with market practice and preventing uncommercial consequences.