In this high court judgment the court considered whether “at the premises” disease cover entailed the same approach to proximate causation as the disease cover considered by the Supreme Court in Financial Conduct Authority v Arch Insurance (UK) Limited [2021] UK SC 1.

The relevant wording of the policy in the lead action read:

“The word Damage is extended to include closure of the Premises or part thereof on the order or advice of any local or governmental authority as a result of an outbreak or occurrence at the Premises of … any human contagious or infectious disease other than Acquired Immune Deficiency Syndrome (AIDS) or any AIDS related condition, an outbreak of which is required by law or stipulated by the governmental authority to be notified.”

There were six test cases.  Although there were differences in the policy wording a common feature was that they referred to occurrences, or some other events “at the premises” and to notifiable diseases.

In the lengthy judgment, and on a selective consideration of the reasoning in the FCA Test Case, the court concluded that the decision of the Supreme Court on causation in the FCA Test Case applies to “at the premises” disease cover.  Thus the court found that ‘at the premises’ cover was indistinguishable from radius cover by giving the broadest possible interpretation of the phrase.

Although an appeal is likely, the case illustrates the courts’ generous attitude to policyholders. The court’s analysis and reasoning should therefore be considered when reviewing and redrafting policy wording.