IF P & C Insurance Ltd v Silversea Cruises Ltd [2004] Ll. R.I.R. 217
Citation: IF P & C Insurance Ltd v Silversea Cruises Ltd [2004] Ll. R.I.R. 217
Rule of thumb: If a terrorist attack causes an organisation a loss of profits, and they have a business interruption policy, is the loss of profits covered? As a general rule of thumb, yes.
Judgment:
Where parties try to make obscure arguments regarding the meaning of clauses in a policy these are unlikely to be accepted in insurance interpretation disputes. In this ‘loss of income’ profits were lost by a cruise company when people were discouraged from going on a cruise due to the 9/11 attacks (planes were hijacked meaning people were discouraged from travelling abroad). The business were covered for ‘terrorist warnings’ and ‘increases in terrorist threats’ and the insurers tried to argue that 9/11 was a one-off chilling event rather than there being any increased level of threat generally. The Court held that the holiday company were covered for lost profits under this policy after the 9/11 event, ‘...business interruption policy ... for loss of income suffered by a cruise line following the 9/11 New York attacks.... The policy covered loss of income... "resulting from a State Department Advisory or similar warning regarding ... terrorist activities, whether actual or threatened…" ... One of the insurers' arguments was that any loss of income was attributable to the attacks themselves rather than any SDA warning.... rejected ... it is impossible to divorce the effect of the warnings from the effect of the events which they so swiftly followed... I also note in passing that since, as I find, and as was common ground between the two experts, the events of 11 September and the warnings were concurrent causes of the downturn in bookings, including cancellations thereof, and since the consequences of the events of September 11 are not for the purposes of section Aii excluded from the ambit of the cover, as opposed to being simply not covered, a claim under the policy must lie — see Wayne Tank and Pump Company Ltd v Employers Liability Assurance Corporation Ltd [1974] 1 QB 57. I am not sure that, on this hypothesis, insurers contend to the contrary." Tomlinson J at 69
Warning: This is not professional legal advice. This is not professional legal education advice. Please obtain professional guidance before embarking on any legal course of action. This is just an interpretation of a Judgment by persons of legal insight & varying levels of legal specialism, experience & expertise. Please read the Judgment yourself and form your own interpretation of it with professional assistance.