Cases involving the extent of business interruption insurance cover for losses arising due to the COVID-19 pandemic continue to come before the courts. Recently, the High Court was called upon to determine whether the British Horseracing Authority (BHA) and the Greyhound Board of Great Britain (GBGB) fell within the definition of ‘any other competent authority’ in a section of an insurance policy dealing with denial of access to premises.
On 18 March 2020, the BHA instructed that horse racing in England and Wales should be suspended. On the same day, the GBGB gave instructions that greyhound racing should take place without spectators. It suspended greyhound racing six days later, after the first lockdown was announced.
A group that operated racecourses and greyhound tracks had business interruption insurance that included cover for denial of access in respect of ‘action by the Police Authority and/or the Government or any local Government body or any other competent authority’. The group claimed that the denial of access cover was engaged when lockdown and other measures were put in place as a result of COVID-19. One of the issues the Court had to decide was whether the actions of the BHA and the GBGB were actions of competent authorities for the purposes of the denial of access cover.
The group argued that the phrase ‘any other competent authority’ embraced any authority other than those mentioned which was competent to take action. It contended that the role and powers of the BHA and the GBGB would have been in the objective contemplation of a reasonable policyholder seeking to insure racecourses and greyhound tracks against business interruption risks.
The group’s insurers argued that the words ‘competent authority’ took their colour from the types of authority preceding them, such as the Police and the Government. Unlike the BHA and the GBGB, these authorities were all organs of the state. While sporting regulators might be expected to take an interest in activities at the group’s premises, a reasonable policyholder would not consider them to be responsible for taking ‘action’.
Concluding that the BHA and the GBGB fell within the definition of competent authorities, the Court did not agree that the word ‘authority’ necessarily implied an organ of the state. If someone had asked a reasonable policyholder, who understood a little about the regulation of horse and greyhound racing, which authorities might issue instructions restricting the use of racecourses in the event of a danger to public safety, the BHA and the GBGB would have been on the list, and quite possibly towards the top of it.