Bellini (N/E) Ltd v Brit UW Limited
[2024] EWCA Civ 435
Bellini (N/E) Ltd trading as Bellini v Brit UW Limited
26 June 2023
[2023] EWHC 1545 (Comm)
High Court
The restaurant's insurance didn't cover losses from COVID-19 because the policy only paid out if there was physical damage to the restaurant, and there wasn't. The judge said the policy was clear and didn't need changing.
Key Facts
- •Bellini Ltd. (Claimant) sued Brit UW Ltd. (Defendant) for business interruption losses due to the COVID-19 pandemic under a policy of insurance.
- •The policy (clause 8.2.6) covered business interruption caused by damage arising from a notifiable disease within 25 miles of the premises.
- •The policy defined "damage" as physical loss, physical damage, or physical destruction (clause 18.16.1).
- •There was no physical damage to the Claimant's premises.
- •The preliminary issue was whether clause 8.2.6 provided cover in the absence of physical damage.
Legal Principles
Contractual interpretation requires an objective assessment of what a reasonable person would understand the contract to mean, considering the background knowledge available to the parties.
Wood v Capita [2017] UKSC 24 and Financial Conduct Authority v Arch Insurance (UK) Ltd [2021] UKSC 1
Where a word is expressly defined in a contract, the court will generally give effect to that definition.
Lewison on the Interpretation of Contracts, 7th Ed.
Arguments of redundancy are given limited weight in construing insurance contracts.
Unspecified case law, mentioned in section 31
Outcomes
The court found that clause 8.2.6 of the Policy provides no cover in the absence of physical damage as defined in the policy.
The policy expressly defined 'damage' as physical loss, physical damage, or physical destruction. The court found no ambiguity or inconsistency in the wording of clause 8.2.6, rejecting the claimant's argument that 'damage' should have a broader meaning in this context. The court emphasized the express definition of 'damage' and the lack of justification for departing from it.