Russia: COVID-19 Related Insurance Update and Invitation to Participate in the Poll

In brief

COVID-19 pandemics has triggered insurance claims based on business interruption and other relevant policies all over the world. In this alert we would like to:

  1. invite you to participate in a poll aimed to examine policyholders' experience in dealing with pandemics-related insurance;
  2. inform you on the recent UK Supreme Court landmark judgment regarding application of business interruption policies coverage to the COVID-19 related financial losses; and
  3. update you on some developments in Russia regarding insurance coverage of the COVID-19 related financial losses.

Contents

1. Invitation to participate in a poll aimed to examine policyholders' experience in dealing with pandemics-related insurance

If your company had an insurance policy that covered or should have covered the pandemics-related risks, we invite you to participate in our poll. The poll will be held among our clients in 11 European jurisdictions, including Belgium, France, Germany, Netherlands, Poland, Russia, Sweden, Switzerland, Turkey, UK and Ukraine.

The poll will be open until 28 February, and upon its completion, we will be happy to share the results with you. Needless to say that the responding companies' names will not be disclosed; furthermore, you may respond on a no-name basis if you would prefer to.

The poll is available through the link here.

2. UK Supreme Court landmark judgment regarding application of business interruption policies coverage to the COVID-19 related financial losses

Recently the UK Supreme Court has handed down a landmark judgment in the COVID-19 Business Interruption (BI) insurance test case brought by the UK Financial Conduct Authority (FCA), providing much-needed clarity regarding the coverage generally afforded to businesses for their COVID-19 related financial losses, and establishing a starting position from which BI claims can proceed to assessment (or reassessment) and settlement. The judgment considers issues of principle on policy coverage under 21 sample policies underwritten by eight leading providers. The Supreme Court held that:

  • "notifiable disease" clauses specifying a strict geographical area may be triggered by a single person within that area falling ill with COVID-19; 
  • public authority instructions to close insured premises need not have the full force of law to trigger cover; 
  • the partial closure of insured premises may be sufficient to trigger cover; and 
  • it is irrelevant that COVID-19 related losses may have been suffered in any event (for example, due to people being instructed to stay at home).

The position in which policyholders now find themselves will be clearer for some than for others; policyholders should examine their own policies, each of which will require careful review against the Supreme Court's detailed analysis. The FCA anticipates that a further 700 types of policies, across 60 insurers and held by 370,000 policyholders, may be impacted by the Supreme Court's judgment. 

Looking beyond COVID-19, the Supreme Court and High Court judgments provide useful insights into the scope of BI cover afforded for other perils, such as environmental disasters, "acts of God" and potentially, political unrest and war. The judgments also add to the interpretation of "event", "occurrence", "incident", and "competent local authority". 

For further detail, please see our alert here.

3. Developments in Russia on insurance coverage of the COVID-19 related financial losses

In Russia, there have been no developments similar to those in the UK, and no established court practice has yet emerged. To date, we identified only one court case that has passed through at least an appellate stage where the insured claimed COVID-19 related losses to its business from the insurer based on the policy.

In case No. A40-119472/2020, the insured claimed on the basis of a property insurance policy for the losses caused by deprivation of the leased premises due to COVID-19 restrictive measures. By its judgment of 29 October 2020, the Arbitrazh Court of the City of Moscow dismissed the claim, holding that such deprivation of the leased premises was not an insured event under the policy. On 21 January 2021, the Ninth Arbitrazh Appellate Court upheld the judgment. The case, however, can still further be appealed to the cassation court.

We will keep you informed on further developments.

View Russian version


Copyright © 2024 Baker & McKenzie. All rights reserved. Ownership: This documentation and content (Content) is a proprietary resource owned exclusively by Baker McKenzie (meaning Baker & McKenzie International and its member firms). The Content is protected under international copyright conventions. Use of this Content does not of itself create a contractual relationship, nor any attorney/client relationship, between Baker McKenzie and any person. Non-reliance and exclusion: All Content is for informational purposes only and may not reflect the most current legal and regulatory developments. All summaries of the laws, regulations and practice are subject to change. The Content is not offered as legal or professional advice for any specific matter. It is not intended to be a substitute for reference to (and compliance with) the detailed provisions of applicable laws, rules, regulations or forms. Legal advice should always be sought before taking any action or refraining from taking any action based on any Content. Baker McKenzie and the editors and the contributing authors do not guarantee the accuracy of the Content and expressly disclaim any and all liability to any person in respect of the consequences of anything done or permitted to be done or omitted to be done wholly or partly in reliance upon the whole or any part of the Content. The Content may contain links to external websites and external websites may link to the Content. Baker McKenzie is not responsible for the content or operation of any such external sites and disclaims all liability, howsoever occurring, in respect of the content or operation of any such external websites. Attorney Advertising: This Content may qualify as “Attorney Advertising” requiring notice in some jurisdictions. To the extent that this Content may qualify as Attorney Advertising, PRIOR RESULTS DO NOT GUARANTEE A SIMILAR OUTCOME. Reproduction: Reproduction of reasonable portions of the Content is permitted provided that (i) such reproductions are made available free of charge and for non-commercial purposes, (ii) such reproductions are properly attributed to Baker McKenzie, (iii) the portion of the Content being reproduced is not altered or made available in a manner that modifies the Content or presents the Content being reproduced in a false light and (iv) notice is made to the disclaimers included on the Content. The permission to re-copy does not allow for incorporation of any substantial portion of the Content in any work or publication, whether in hard copy, electronic or any other form or for commercial purposes.