Can a Historical Event Affect Your Insurance Claim?

It seems that it can. In late 2023, the Court of Appeal handed down judgment in an insurance case with a result which may surprise many.

In 1942, during the so-called Beidecker campaign, a 2200lb bomb was dropped by the Luftwaffe on Exeter. It did not explode. Jump forward to 2021 and the bomb is unearthed during construction. A 400-metre exclusion zone was declared, which included two buildings containing Exeter University halls of residence which had been made to be evacuated. There was a controlled explosion which caused some damage to the halls of residence. The University was insured and claimed on their policy for business interruption due to the evacuation and the physical damage.

The insurance policy contained an exclusion clause for damage “occasioned by war”. The insurers declined the claim.

The issue was what was the “proximate” cause of the loss. It might seem logical to think the answer was clearly the controlled explosion. Not so when applying insurance law principles.

Firstly, in terms of insurance law, proximate is the effective cause of a loss, rather than a timeframe.

Secondly where there are two proximate causes and one is an insured peril and the other not, then the policy will respond. The test case for this is that of the yacht Miss Jay, where the proximate causes of damage were equally adverse weather (an insured peril) and unseaworthiness due to a design defect (not insured against) and the Court said that the insurer was obliged to honour the claim.

Thirdly where there are two proximate causes and one is specifically excluded by the policy terms, the exclusion will prevail.

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Applying these principles, the Court of Appeal held that the controlled explosion would not have occurred if the bomb had not been dropped in the first place. Therefore, the proximate, or indeed a proximate cause (together with the controlled explosion), of the loss was the dropping of the bomb in 1942 and therefore the damage was caught by the exclusion as being “occasioned by war”, that is the dropping of the bomb by the Luftwaffe in 1942. The University’s claim therefore failed.

The case illustrates the technicalities of insurance law, which can seem counter-intuitive, and the need for specialist legal advice.

If you need individual advice on an insurance matter, the team at Fraser Dawbarns can help you. Contact David Osborne on DavidOsborne@fraserdawbarns.com or Joshua Shuardson-Hipkin on Joshuas@fraserdawbarns.com in our King’s Lynn office.

This article aims to supply general information, but it is not intended to constitute advice. Every effort is made to ensure that the law referred to is correct at the date of publication and to avoid any statement which may mislead. However, no duty of care is assumed to any person and no liability is accepted for any omission or inaccuracy. Always seek advice specific to your own circumstances. Fraser Dawbarns LLP is always happy to provide such advice.