Denial of access and civil authority cover

Business interruption cover in principle requires physical damage to the insured's property. But a business can be stopped without any damage to its own premises: a fire in the next building leads to a safety cordon, a gas leak forces the street to be evacuated, police seal off a district after an attack, a health authority orders closure. Two extensions address these cases. Denial of access covers interruption caused by damage to nearby property that prevents reaching the insured premises. So-called civil authority cover covers interruption caused by an administrative decision prohibiting access, often provided it is linked to damage or danger within a defined radius. These clauses were of marginal use until 2020. The closures imposed during the Covid-19 pandemic put them at the center of thousands of disputes. In the United Kingdom, a test case brought by the Financial Conduct Authority against several insurers led the Supreme Court, in January 2021, to hold that many such clauses responded to losses caused by the health measures. In France, litigation over restaurateurs' administrative closure clauses produced mixed outcomes. The market has since rewritten these extensions, expressly excluding communicable diseases.