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Law360, London (June 1, 2021, 1:34 PM BST) -- A law firm has sued Aviva seeking a payout under a business interruption policy after its staff were unable to work from a main office during England's first coronavirus lockdown.
Everatt's LLP has argued in a High Court lawsuit that it is owed money by Aviva Insurance Ltd. for loss of income caused by the COVID-19 pandemic. The law firm says it has a claim under the prevention of access clause of its policy, which kicks in when access to premises is denied as a result of action by government or a public authority.
Prime Minister Boris Johnson ordered a national lockdown in March 2020 as the government sought to control the spread of the coronavirus. Many workplaces were forced to close, with millions of people working instead from home.
The restrictions meant that Everatt's partners and staff could not work from a building in Harrow, northwest London, according to the May 7 filing, which has recently been made public. Lawyers could not meet clients, make or receive phone calls or gain access to documents, the claim reads. They were generally "unable to work efficiently without access to all the facilities available at the premises."
Everatt's, which has been acquired by Axiom Stone Solicitors, says its claim against Aviva was assigned to chartered loss adjusters Sedgwick International UK in January, but since then there has been no proposals or interim payouts.
Everatt's said in its lawsuit that it is covered for loss of income up to £478,000 ($677,000), and a range of increased offices expenses totaling approximately £150,000.
The question of whether insurers should pay out on business interruption policies because of the pandemic lockdowns has already reached the U.K's Supreme Court. A judgment in January found in favor of many policyholders after the Financial Conduct Authority, the City watchdog, brought a test case on their behalf.
The regulator had sued eight insurers with 21 policy wordings as it sought to reach an "authoritative declaratory judgment" that would have wide application.
The test case shone a light on so-called non-damage extensions to business interruption insurance. Policies for interrupted business often offer cover only if a company is forced to close as a result of physical damage to a property. Many insurers refused to pay out on claims after the country was first locked down in March and the coronavirus outbreak took hold. Such policies were not intended to cover global pandemics, they argued.
An earlier High Court ruling largely found in favor of policyholders: the court found that such policies would pay out if it could be proven that there was a single case of COVID-19 within that radius.
Aviva did not immediately respond to Law360's request for comment on Tuesday.
Everatt's is represented by Axiom Stone Solicitors. Full counsel information was not immediately available.
Counsel information for the defendants was not immediately available.
The case is Everatt's LLP v. Aviva Insurance Ltd., case number CL-2021-000275 in the Commercial Court, High Court of Justice of England and Wales.
--Editing by Joe Millis.
For a reprint of this article, please contact reprints@law360.com.
