Racing authorities exercised their powers as 'competent entities' in handling a Covid-related case, judge states in ruling.
The ongoing saga of business interruption (BI) insurance claims related to the Covid-19 pandemic continues, with the latest development being the UK Supreme Court's decision to grant permission to appeal in the Bath Racecourse v Liberty Mutual Insurance Europe case. This ruling, which concerns the interpretation of business interruption insurance policies in response to measures taken by the British Horseracing Authority (BHA) and the Greyhound Board of Great Britain, has significant implications for the insurance industry.
The Court of Appeal previously ruled in favour of the insurers, rejecting the policyholders' argument that furlough receipts fall outside the scope of the insurer's savings clause. This decision is now being challenged, as the Supreme Court has granted permission to appeal on the issue of the treatment of furlough payments. This appeal will have wide-reaching implications, potentially affecting billions in claims across the pandemic BI insurance market.
The Bath Racecourse case is a prime example of the complexities surrounding BI claims during the pandemic. The court noted that the BHA and GBGB, despite being private companies, are competent authorities for the purposes of the policy. Each materially distinct restriction, such as moving from full closure to limited reopening, could constitute a new "trigger" for cover. Multiple race meetings, affected on different days by the same or different restrictions, can give rise to distinct losses.
The court's ruling forms part of a continuing wave of pandemic-related insurance litigation, following the landmark Supreme Court ruling in FCA v Arch Insurance (UK) [2021]. The court sided largely with the claimants, regarding each cancelled race meeting or materially different restriction as a separate insured loss. The judge found that easing restrictions could give rise to fresh losses if a new action by an authority resulted in an interference with the business materially different from that which existed before.
Stewarts' James Breese, representing Bath Racecourse, commented on the judgment, stating that it clarifies the treatment of businesses with multiple premises and their separate limits and sub-limits of indemnity. The current status of "any one loss" arguments in BI insurance claims, particularly relating to the Covid-19 pandemic and the Bath Racecourse case, remains contentious and under active litigation, with significant developments as of mid-2025.
Industry and legal commentators emphasize that coverage typically requires a nexus to physical property damage or specified covered events, and that exclusions or savings clauses (like “any one loss”) play a critical role in claims adjustments. Final rulings from top courts like the Supreme Court will be pivotal in resolving these issues and clarifying the status of “any one loss” arguments in Covid BI claims.
As the Bath Racecourse case makes its way through the Supreme Court, the insurance industry and policyholders will be closely watching the outcome. The decision could set a precedent for future BI claims and provide much-needed clarity in an area that has been fraught with uncertainty.
The ongoing Supreme Court appeal in the Bath Racecourse v Liberty Mutual Insurance Europe case could have a significant impact on the interpretation of business interruption insurance policies, not only in the sports industry but also for businesses in other sectors affected by the Covid-19 pandemic. The appeal's outcome may impact billions in claims across the pandemic BI insurance market due to its wide-reaching implications, potentially affecting the interpretation of savings clauses and the treatment of furlough payments.
Given the potential precedent this case could set, the insurance industry and policyholders alike are closely monitoring the case, as a favorable decision for the claimants could influence future business interruption claims and provide much-needed clarity in an area that has been fraught with uncertainty.
