Business Interruption Insurance Cover Triggered by Covid 19 Restrictions

The High Court has provided additional guidance on the wider implications of a previous judgment in which it held that business interruption cover under a policy of insurance (Policy) had been triggered as a consequence of Covid-19 restrictions.

In the primary judgment, Marlin Apartments Limited t/a Marlin Hotel Dublin v Allianz plc [2024] IEHC 550, it was held that the plaintiff, the operator of the Marlin Hotel (Hotel), could rely on Extension 6 of the Policy to cover losses related to restrictions imposed on 24 December 2020, but the Policy was not triggered in respect of two other specified time periods.

Pursuant to its obligations under the Central Bank of Ireland’s Covid-19 and Business Interruption Insurance Supervisory Framework, the defendant sought guidance from the court on issues relating to the application of the primary judgment in determining the defendant’s wider liability to other insureds.  The court delivered a supplemental judgment in April 2025 on these issues, with the plaintiff having agreed to act as a legitimus contradictor (i.e. to argue against the proposition advanced by the defendant), despite not being directly affected.

Elements of Extension 6

Extension 6 of the Policy provided for loss resulting from business interruption “in consequence of any occurrence of a notifiable disease…at the premises”, which caused the use of the Hotel to be restricted “on the order or advice of the competent authority”.

The court considered that the meaning of “occurrence” in Extension 6 should be given its ordinary and natural meaning in the absence of any indication to the contrary. Given the incubation period for Covid-19, it was reasonable to interpret the “occurrence” of the disease as being capable of happening within a date range and not confined solely to a happening on one specific date. However, the court emphasised that sufficient specificity of the date range was required.

The court concluded that the wording “at the premises” in the Policy was “self-explanatory”, with Extension 6 plainly requiring that there should be an occurrence of a notifiable disease at the Hotel premises.

As such, in order for Extension 6 to apply, the plaintiff had to prove, on the balance of probabilities, that there was a case of Covid-19 within the perimeter of the Hotel at the relevant periods. In addition, if such an occurrence was proved, it would then be necessary  to evidence that such an occurrence caused the relevant restrictions to be imposed on the Hotel by a competent authority.

Occurrences of Covid-19 at the Hotel

One of the periods at issue in the case concerned the restrictions requiring pubs and restaurants to close on 24 December 2020. The manager of the Hotel tested positive for Covid-19 on 23 December 2020 and based on the medical evidence, the court was satisfied that he must have been infected before 21 December 2020. The manager had not left the Hotel during the  previous fortnight and the court inferred, as a matter of probability, that the manager must have been infected by someone within the Hotel during that period.  The court was satisfied that the first requirement of the plaintiff to evidence the occurrence of a notifiable disease within the meaning of Extension 6 had, therefore, been met in respect of the 24 December 2020 restrictions.

Two other periods of restrictions in March 2020 and September 2020 were also at issue but no evidence was provided that any staff member or guest of the Hotel was diagnosed with Covid-19 in the relevant periods. The court concluded that the plaintiff failed to prove, on the balance of probabilities, that there was a case of Covid-19 at the Hotel during these periods and so Extension 6 did not apply.

Causation

Following the finding of an occurrence of a notifiable disease in respect of the 24 December restrictions, the court then had to consider whether this could be said to have caused the decision to impose restrictions on the Hotel, even if the cases were not reported or there was no evidence that they were known to the government.

Expert evidence was given that Covid-19 is asymptomatic in at least one-third of the infected population so that in addition to confirmed cases, there also would have been a substantial number of unconfirmed cases at the relevant time. The court opined that the government, in introducing  restrictions, must, of necessity, have had in mind not only the reported cases but also the very substantial number of unconfirmed cases and each occurrence of Covid-19 (whether reported or not) was instrumental in the decision to enact restrictions on 24 December 2020. It could not be said that any one occurrence of Covid-19 was any more effective in the enactment of restrictions than any other, such that each occurrence could be said to be the concurrent proximate cause of their enactment.

Interpretation

The court considered whether a reasonable person in the position of the parties would understand, at the time the Policy was agreed, that cover would be available in respect of a restriction imposed by a competent authority in response to an unreported or undiagnosed or asymptomatic case of Covid-19 at the Hotel. The court held that it could readily be envisaged that it might be necessary to impose restrictions on a premises where people mix, such as bars or hotels, in response to occurrences of a highly contagious disease, whether reported or not.

The court further held that any argument that Extension 6 related only to restrictions imposed solely on the Hotel, as opposed to a response to a national outbreak, would be to re-write the clause. Once the insured proves each individual element of the peril, the insurer has agreed to provide cover and the existence of cases outside the Hotel could not be used as a basis for disapplying  that cover.  

Additional Issues in the Supplemental Judgment

In terms of the wider implications of these findings, the defendant asked the court to consider whether there is a cut-off date such that any cases of Covid-19 which occurred prior to that date could not be said to have caused 24 December 2020 restrictions. The court, noting that restrictions had been relaxed from 1 December 2020, found that it would be implausible to suggest that cases of Covid-19 which occurred prior to 1 December 2020 had any impact on the 24 December restrictions. In considering evidence on incidence rates, the court was satisfied that any cases of Covid-19 shown to be present on the premises of a relevant insured in the period between midnight on 9 December 2020 and 22 December 2020 all formed part of the cases which caused the enactment of the 24 December restrictions.

The court also looked at the extent to which a policyholder could make a case that an infection, which was diagnosed after the making of a restriction order, could be said to have occurred prior to the making of that order. There was agreed expert evidence before the court that the usual incubation period was between three and five days, meaning that cases of the disease may occur before it can be diagnosed. The court held that if a policyholder can show (a) that a person was on the insured premises on the day a restriction order was made and (b) that person was diagnosed or otherwise shown to have Covid-19 within five days of the restriction order, that occurrence of Covid-19 should be accepted as having occurred prior to the making of the restriction order such that it can be considered to have led to the making of the restriction order.

Conclusion

The court’s findings in this case are fact specific, particularly in terms of the wording of the Policy. 

Nonetheless, it is another decision from the High Court, which has found that business interruption insurance cover can extend to loses incurred as a result of Covid-19 related restrictions. It is also noteworthy that each individual case of Covid-19 was held to be equally instrumental in the decision to impose the restrictions, regardless of whether the case had been reported or not. The court also, helpfully, provided tangible guidance on the practical interpretation of its findings.