The Covid 19 Pandemic and Business Interruption Insurance (BII)
The Covid 19 Pandemic and Business Interruption Insurance (BII)
28 February 2023
The Covid 19 pandemic has cost millions of lives. Its deleterious effects on mental health as well as social, cultural and educational development has been well documented. Its dire economic consequences were arguably greater than those of any event since the Wall Street Crash of 1929.
The global insurance industry has suffered an estimated US$44 billion in losses as a consequence of the Covid 19 pandemic. Many pandemic-related claims were made by businesses which could not operate due to outbreaks of the disease and related government ‘lockdowns’. Many insurers preferred to litigate over such claims rather than pay them, believing that their magnitude – in terms of both their number and size – could lead to their own financial collapse. Decisions such as that of the UK Supreme Court in FCA v Arch have followed. Some have favoured policyholders whereas others have not. The development of pandemic risk insurance on a public-private basic has been mooted as a way of closing a perceived ‘protection gap’ in relation to Covid 19 and possible future pandemics. Many schemes have been proposed but none have been implemented.
This seminar looks at the nature of BII cover; examines the decision in FCA v Arch and other significant cases; and considers the future of BII and pandemic risk insurance cover. It draws upon the speaker’s research for his article Business not as usual – The Financial Conduct Authority v Arch Insurance (UK) Ltd (2022) J.B.L., Issue 4 pp 257-281 and his chapter Pandemics and Disasters: Insurance Challenges for the forthcoming book The Global Insurance Market and Change: Emerging Technologies, Risks and Legal Challenges (Routledge, 2023) edited by Dr Tony Tarr.
About the Speaker:
Gary Meggitt, Associate Professor, Faculty of Law, The University of Hong Kong
Gary was admitted as a solicitor in England & Wales and spent 12 years in practice with several leading UK law firms. He was also Called to the Bar in England & Wales. After leaving private practice, Gary taught at BPP Law School in London and was the Course Director of its Full-Time Bar Vocational Course (BVC). He joined the Law Faculty at HKU in 2007 and teaches civil litigation, commercial dispute resolution, professional conduct and insurance law. He is the author of Wilkinson’s Professional Conduct of Lawyers in Hong Kong (Sixth Desk Edition, LexisNexis, 2022) and Mediation and ADR Confidentiality in Hong Kong (Wildy, Simmonds & Hill Publishing, 2019). Gary is a member of the Hong Kong Law Society’s Insurance Law Committee and also serves as Convener for Head IV (Accounts & Professional Conduct) of the Overseas Lawyers Qualification Examination.
Chair: Kelvin Kwok, Associate Dean (Academic Affairs) and Associate Professor, Faculty of Law, HKU
Enquiries: Flora Leung at aiiflhku@hku.hk