In a case still to come to court in the UK, insurers and their insured are in a dispute whether the deluge of rain and flooding that occurred in England in September 2023 resulted in damage caused by a “storm”. The property damage and business interruption policy limited cover for a “storm” to GBP25 million. The total loss is expected to be in the region of GBP60 million. The insurers have asserted that the term “storm” is usually applied to major rainfall accompanied by a high wind. Some previous English case law has referred to a “storm” as some form of violent wind accompanied by heavy rain, hail or snow.
Needless to say, the insured disagrees with this submission. The very heavy rainfall and consequent flooding allegedly caused a resort run by the insured caused the GBP60 million loss for costs of repairs as well as loss of revenue by tens of thousands of cancellations and discounts on replacement stays. The severity of weather is said to be “way outside the range of what would normally be dealt with”.
The issue has still to be decided in the proceedings, if they go to court.
Underwriters could be aware that if they provide cover for the traditional storm, wind, water, hail or snow and wish to limit the indemnity for any one of those special perils, they better make it clear what event the limitation applies to. Words like “storm” mean different things to different people and we are likely to find that a judge or ombud is going to be a different people from the insurer if there is no clear definition.