Insuring Against COVID-19: Contrasting Approaches Between SG and the UK
By Joshua Ng
Depending on where you lived during the COVID-19 Pandemic, the frequency and severity of government-mandated lockdowns would have differed. The United Kingdom, for example, lifted restrictions on 18 March 2022 . Singapore, on the other hand, lifted most of its restrictions on April 26 . These would have, in turn, affected the degree to which your business was disrupted. The recent decisions of The Financial Conduct Authority v Arch Insurance (UK) Ltd & others  UKSC 1 and Corbin & King Ltd & Ors v AXA Insurance UK Plc  EWHC 409 (Comm), where the courts held that certain types of business interruption insurance did cover government lockdowns, suggest that there might be some relief for businesses disrupted by government restrictions. The (literal) million-dollar question is therefore whether these decisions are applicable to the Singapore context.
Summarising Arch Insurance and Corbin & King
It is first necessary to consider the particular facts of Arch Insurance and Corbin & King, in order to understand why and how the courts ruled the way they did.
Corbin & King concerned a specific type of clause as part of a wider Business Interruption insurance policy. The insurance policy was stated to cover:
“any loss … resulting from interruption or interference with the business where access to [the business] premises is restricted or hindered for more than the franchise period shown in your schedule arising directly from:
The actions taken by the police or any other statutory body in response to a danger or disturbance at your premises or within a 1 mile radius of your premises.
The unlawful occupation of your premises by third parties” 
This is known as a Non-Damage Denial of Access (NDDA) clause. In simple terms, the insurance policy covers (a) a denial of access to the business premises, (b) enacted by the government, (c) in response to a danger within 1 mile of the business premises. The Court held that a government lockdown was (a) a denial of access , (b), enacted by the government , and that (c) COVID-19 constituted a danger within 1 mile of business premises . Accordingly, COVID lockdowns were covered by the NDDA clause, and the insurer, AXA Insurance UK, was liable for a sum up to £250,000 per the policy wording .
On the other hand, Arch Insurance concerned three types of clauses :
● Disease clauses, which provide cover for business interruption caused by occurrence of a “notifiable disease” within a specified distance of business premises;
● Denial of Access clauses, which provide cover for business interruption caused by prevention of access to the business premises due to the actions or advice of a government or local authority, due to an emergency which is likely to endanger life or property.
● Hybrid clauses, which cover business interruption caused by a prevention of access due to occurrence of a disease.
To summarise the Supreme Court’s findings, the court held that instances of people falling ill with COVID-19 within the specified distance of the insured businesses would trigger Disease clauses . The interpretation of Denial of Access Clauses and Hybrid clauses was subsequently clarified by Corbin & King, which is analysed above.
We can therefore see that Corbin & King and Arch Insurance were decided the way they were because of the specific policy wording of the Business Interruption insurance in question - in both cases, insurance specifically covered business interruption caused by non-physical means, whether by virtue of a notifiable disease, or denial of access due to government restrictions in response to a danger.
A Singapore Approach?
A brief survey of three Insurance providers in Singapore (AXA, China Taiping, and Tokio Marine) suggests that the two English cases are on their face inapplicable to the Singapore context. The reasons for this differ based on the insurer.
In AXA  and China Taipings’  case, business interruption caused by non-physical means is simply not covered. AXA appears to only cover business interruption arising from physical damage to property, while China Taiping appears to only cover business interruption arising from fire, lightning, and explosion damage.
On the other hand, Tokio Marine specifically excludes coverage for business interruptions caused by the imposition of government restrictions, thus barring a claim founded on COVID-19 lockdowns imposed by the government .
Tokio Marine and China Taipings’ Business Interruption policies hence appear to provide no possible ‘wiggle room’ for bringing a business interruption claim as a result of COVID-19 lockdowns. However, it may still be possible to bring a claim under AXA’s policy, which contains the following clauses:
● “If during the Period of Insurance, any Insured Property (as insured under the All Risks Section) used by You at the premises for the purpose of the business be destroyed or damaged by the contingencies insured under the same section (hereinafter termed Damage) and the business carried out by You be interrupted or interfered with, We will pay to You the amount of loss of income resulting from such interruption or interference in accordance with the stated Basis of Settlement (as shown in the Schedule)
● If physical loss or damage caused by an Insured Peril to property of others nearby the Location affects access to the Location insured then such denial of access to or use of the Location insured shall be deemed to be property damage for which Business Interruption will apply.”
Under AXA’s policy, a COVID-19 lockdown claim might hence succeed if two elements are proven: (a) that contamination with the virus is considered “damage” (in the case of one’s own property), or “physical damage” (in the case of the property of others); and (b) the contamination causes the government lockdown, which causes the insured business to suffer a loss of income.
The first requirement, that contamination with the coronavirus is considered damage or even physical damage, might be satisfied. Blue Circle Industries Plc v Ministry of Defence  2 W.L.R. 295 establishes that the test for physical damage is whether there was “some change in the physical characteristics of the property rendering it less useful or valuable”, leading the court to conclude that the contamination of soil with plutonium counted as physical damage . Applying the Blue Circle Industries test, contamination with the coronavirus could conceivably count as physical damage. Doing so would change the physical characteristics of the contaminated property, making it likely to transmit instances of the virus. Moreover, in the same way that the “intermingling” of plutonium with soil does not change the soil on an atomic or molecular level, contamination with the coronavirus need not alter the atomic or molecular composition of the property. The virus itself, like plutonium particles, need only be present. This would surely render the property less valuable until decontaminated. In fact, even if the contamination is expeditiously remedied, this is no bar to a claim, per Losinjska Polvidba v Transco Overseas Ltd and Others (The “Orluja”)  2 Lloyd's Rep. 395. As such, contamination with the coronavirus might satisfy the first requirement for bringing a claim under AXA’s business interruption policy.
The second requirement of causation is also ostensibly satisfied, and this is where Arch Insurance might be applicable. The Supreme Court in Arch Insurance held that multiple concurrent causes that are all ultimately traceable back to the Insured Peril can satisfy causation. In other words, it does not matter that government lockdowns are caused not just by COVID-19 contamination, but also by the government’s assessment of the country’s COVID-19 situation as a whole . This is because the Insured Peril, the coronavirus, is still at the ‘root’ of the causal chain. Causation in a potential Singaporean claim is hence self-evident: COVID-19 contamination would be considered a concurrent cause of a government lockdown, which in turn caused the business’ loss of income.
Given that both elements for a COVID-19 lockdown claim might be provable, it might therefore be possible to bring a claim under AXA’s policy for business interruption claim as a result of COVID-19 lockdowns. That said, it must be noted that the limit for any such claim in Singapore is S$5000. This stands in stark contrast to the £250,000 limit in the UK, and might be considerably less than any legal expenses incurred in litigating such a claim. It may be advisable instead to settle this claim outside of court, or to simply not bring one.
We can thus see that Business Interruption Insurance policies differ significantly between the UK and Singapore. This makes it less feasible to bring a business interruption claim founded on COVID-19 lockdowns in Singapore. That said, the payout for such a claim is relatively small to begin with, and one might lose money litigating said claim compared to the opportunity cost of simply not pursuing it, or settling outside of court.
: Department for Transport, Department of Health and Social Care, The Rt Hon Sajid Javid MP, and The Rt Hon Grant Shapps MP, “ All COVID-19 travel restrictions removed in the UK”, https://www.gov.uk/government/news/all-covid-19-travel-restrictions-removed-in-the-uk, accessed 15 June 2022
: Goh Yan Han, “ Singapore announces major easing of Covid-19 rules from April 26: What you need to know”, https://www.straitstimes.com/singapore/singapore-announces-major-easing-of-covid-19-rules-from-april-26-what-you-need-to-know, accessed 15 June 2022
: Corbin & King Ltd & Ors v AXA Insurance UK Plc  EWHC 409 (Comm), at 
: Ibid at 
: Ibid at 
: Ibid at 
: The Financial Conduct Authority v Arch Insurance (UK) Ltd & others  UKSC 1, at 
: Ibid at 
: AXA Insurance Pte Ltd, “SmartPlan”, p.23
: Tokio Marine Insurance Group, “Consequential Loss / Business Interruption Insurance”, https://www.tokiomarine.com/sg/en/non-life/products/business/property/consequential-loss-business-interruption.html, accessed 17 June 2022
: Blue Circle Industries Plc v Ministry of Defence  2 W.L.R. 295 at 300A
: Arch Insurance at