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Determining Application of Closure/Disease Clause to COVID-19 in Insurance Policy


On 30 March 2022, the High Court in Premier Dale v RSA & Arachas found that a business interruption insurance policy held by the Devlin Hotel situated in Ranelagh, Dublin, did not cover the closure of the business due to the Covid-19 pandemic. The reasoning was found within the “closure/disease” clause in the policy, taken out in October 2019, which was deemed not to cover COVID-19.

In his judgment, Mr Justice McDonald acknowledged that the central issue related to this closure/disease clause. The clause was in place to cover loss arising because of “closure or restrictions placed on the premises on the advice or with the approval of the Medical Officer of Health of the Public Authority and as a result of a notifiable human disease manifesting itself at the premises”. The Devlin had sought to rely on this clause with respect to its closure due to the pandemic and this reliance was subsequently contested by RSA Insurance.

Regarding the definition of a notifiable disease “manifesting itself at the premises”, the judge concluded that this required at least one of the following: 

  • a symptomatic case of a notifiable disease at the hotel;
  • a diagnosed case of a notifiable disease at the premises; or
  • the detection of the causative pathogen.

McDonald J found that the Devlin hotel had failed to prove that COVID-19 had manifested “at” the premises in accordance with the policy. He said the use of the straightforward combination of words “manifesting itself at the premises” plainly shows that the disease must manifest itself at the hotel. Also, it was not accepted that the use of the word “at” in the clause suggested an approximate location. As a result of McDonald J’s findings, the Devlin was not entitled to cover for pandemic losses under the RSA insurance policy. This finding will no doubt provide further clarity for the insurance sector in relation to the handling of similar claims.


Contributed by Frank Hanly