Lydian Successfully Obtains Favorable Ruling in COVID-19 Business Interruption Insurance Case for Client

Right before Christmas Lydian obtained for one of its clients insurers a victory in a landmark case on Covid-19 coverage for business interruption loss. The Lydian team was composed of Partner Hugo Keulers and Associate Nik Vanheer who acted for the insurer under an Environmental Liability Policy. This policy was peculiar to the extent that the Pollution Conditions included a virus pollution and that Business Interruption (BI) Losses occurring in certain premises owned or occupied by the insured would also be covered.

The Brussels Enterprise Court followed the insurer in its argument that the insured did not proof the actual presence of the Sars-Cov-2 virus on each of the insured properties, nor the fact that the business interruption loss was caused by necessary sanitation measures and also limited to the duration of these sanitation measures. Hence, the court applied in strict terms the coverage conditions and established that the insured failed to succeed in its burden of proof. In doing so, the court ignored the reference to the FCA Test Case Judgment from the UK Supreme Court that was invoked by the insured.

This is only one of few Covid-19 coverage disputes in Belgium. The reason for such rare case law is that Belgium does not have a practice of property policies that cover BI losses without requiring also some form of physical or property damage. The other pending cases concern the application of event cancellation insurance contracts for events that were cancelled because of governmental lockdown measures during the pandemic.

For further information related to the services provided, please contact Hugo Keulers.