CL-2023-000064 - [2025] EWHC 1870 (Comm)

The Policy is a composite policy for “Material Damage and Business Interruption as defined In the attached Wording”. As I have said, it was for the period 1 January 2020 until 31 December 2020.

The “INSURED” are the various holding companies in the Arena Group “&/or subsidiary companies”, which definition embraces all of the Cs.

The U/Ws wrote cover on a 40/20/40 basis and are together the “Insurer”. The total premium payable was £627,035.

Section 1 of the Policy covers material damage, and section 2 covers BI.

In relation to section 2, the following interests and sums insured are given:

The basic insuring clause for section 2 is as follows:

“If Damage as defined in Section 1 occurs at The Premises to property used by the Insured for the purpose of The Business and causes interruption of or interference with The Business at The Premises the Insurer will indemnify the insured as follows…”.

The Cs’ “Business” is defined as

“Owners, managers and operators of horseracing courses and dog racing tracks, horse trials, harness racing events and all related activities, including on non-racedays, but not limited to training academy for pupil horse trainers, internal and external catering, creche facilities, property owners and provision of facilities for horse trials and events, conferences, exhibitions, seminars, banquets, provision of wedding venues, sports and leisure activities, trade fayres, campsite markets, golf courses, club house auctions, public house, hotels and the provision of land let for the use by circuses, fayres and concerts, and other similar facilities, and sites of specific scientific interest, car boot sales, restaurants, other outdoor events (cross country races etc), hoteliers and operators of golf clubs and security agents.”

The “Premises” are said, at the beginning of the Bluefin/Liberty Combined Wording 2016 which is then amended by various special conditions, to be “The Premises stated in the Schedule”. However, the “Schedule” is the risk details slip, which does not identify any specific addresses.

The “Premises” are then defined again, in the specific context of the BI cover, as:

“…any premises owned occupied or used by the Insured or where goods or records are stored or worked upon or services provided by others on behalf of the Insured anywhere in Great Britain Northern Ireland the Channel Islands or the Isle of Man including whilst in transit in Great Britain Northern Ireland the Channel Islands or the Isle of Man.”

The Indemnity Period is: “the period from the time the Damage occurs until the results of The Business cease to be affected by the Damage but not exceeding the Maximum Indemnity Period stated in The Specification”. That reference to a “Maximum Indemnity Period” means the periods of 12 / 24/ 36 months respectively in the table of interests and sums insured set out above.

“Gross Revenue” is “the money paid or payable to the Insured for work done and services provided in the course of The Business at The Premises” and “Estimated Gross Revenue” is “the amount declared by the Insured to the Insurer representing not less than the Gross Revenue which it is anticipated will be earned by The Business during the financial year most nearly concurrent with the Period of Insurance or a proportionately increased multiple thereof where the Maximum Indemnity Period exceeds twelve months”. Note the reference to that being an amount which has been declared by the Cs to the U/Ws.

Since the BI cover in the Policy is written on the basis of reduction in gross revenue, the operative provision requires the U/Ws to pay an indemnity in respect of “the amount by which the Gross Revenue during the Indemnity Period falls short of the Standard Gross Revenue in consequence of the Damage”. It might be noted that the “Standard Gross Revenue” is “the Gross Revenue during that period in the twelve months immediately before the date of the Damage which corresponds with the Indemnity Period”, but “to which such adjustments shall be made as may be necessary to provide for the trend of The Business and for variations in or other circumstances affecting The Business either before or after the Damage or which would have affected The Business had the Damage not occurred so that the figures thus adjusted shall represent as nearly as may be reasonably practicable the results which but for the Damage would have been obtained during the relative period after the Damage”.

I should also mention the Alternative Trading settlement term as follows:

“If during the Indemnity Period goods are sold or services rendered elsewhere than at The Premises for the benefit of The Business either by the Insured or by others on their behalf the money paid or payable in respect of such sales or services shall be taken into account in arriving at the Turnover/Gross Revenue during the Indemnity Period”.

The “ordinary” BI cover has a limit of liability and a provision for automatic reinstatement as follows:

“The liability of the Insurer shall not exceed in respect of Gross Profit/Gross Revenue 133.33% (one hundred and thirty three and one third per centum) of the Estimated Gross Profit/Estimated Gross Revenue stated in The Specification nor in the whole 133.33% (one hundred and thirty three and one third per cent) of the Estimated Gross Profit/Estimated Gross Revenue

In the absence of written notice by the Insured or the Insurer to the contrary the Insurer’s liability shall not be reduced by the amount of any loss the Insured undertaking to pay the appropriate additional premium for such automatic reinstatement of cover”

The “Denial of Access” extension in which I am most directly interested is provided for in the particular settlement terms of section 2. As originally drawn, it provided as follows:

“This Section extends to include any claim resulting from interruption of or interference with The Business carried on by The Insured at The Premises in consequence of

(a)

Damage to other property within a five mile radius of The Premises which shall prevent or hinder the use of or access to The Premises whether The Premises or property of The Insured are damaged or not

(b)

action by the Police Authority and/or the Government or any local Government body or any other competent authority following danger or disturbance within a one mile radius of The Premises which shall prevent or hinder use of The Premises or Access thereto

(c)

action by the Police Authority and/or the Government or any local Government body or any other competent authority following the suspected or actual presence of a harmful device on or in the vicinity of The Premises provided that the Police Authority shall be informed as immediately as the Insured become aware of the presence of such device

(d)

pollution of any sea beach waterway or river arising from a sudden identifiable unintended and unexpected incident occurring within a five mile radius of The Premises which takes place in its entirety at a specific time and place during the Period of Insurance which shall directly cause a Reduction in Turnover

provided that

1.

after the application of all other terms conditions and provisions of this Section the liability of the Insurer shall not exceed

(i)

GBP 1,000,000 in respect of (a) above any one loss

(ii)

GBP 1,000,000 in respect of (b) above any one loss

(iii)

GBP 100,000 in respect of (c) above any one loss

(iv)

GBP 100,000 in respect of (d) above any one loss

2.

this Extension shall exclude any interruption or interference with The Business the duration of which is less than four hours in respect of (a) and (b) above.”

In condition 22 in the Schedule, these limits of indemnity were amended as follows:

“Notwithstanding anything contained herein to the contrary, the limit in respect of Section 2 – Particular Settlement Terms, Denial of Access:-

-

Proviso (i) is amended in respect of (a) to GBP 1,000,000 and a maximum indemnity period of 3 months

-

Proviso (ii) and (iii) are amended in respect of (b) and (c) to GBP 2,500,000 and a maximum indemnity period of 3 months.”

It should be noted that this maximum indemnity period of 3 months for the denial of access extension is used for the purposes of calculating the indemnity (i.e. “the period from the time the Damage occurs until the results of The Business cease to be affected by the Damage but not exceeding the Maximum Indemnity Period stated in The Specification”). For the denial of access extension limb (b), it was common ground that one must read the term “Damage” as referring to the insured peril, i.e. the triggering of the denial of access extension. That is because there will not be any physical damage, but only an action by an authority. See the decision of the Supreme Court in FCA v Arch (supra) at [257].