Background
Fifteen claimants—hotels, spas, and hospitality operators in the UK, Czechia, Romania, Slovakia, and Hungary—sought indemnity under business interruption policies issued by Generali for losses sustained during the COVID-19 pandemic. The claimants estimated their collective pandemic revenue loss at approximately €400 million and claimed about €160 million in recoverable losses under four Generali policies covering periods from 2018–2020.
The central dispute in this preliminary issues judgment concerned the 2019 Global Policy (covering 30 June 2019 to 29 June 2020). The claimants alleged that during June 2019 renewal negotiations, Generali’s underwriter Derek Humphries agreed to include a “conformity term”—a contractual clause providing that the 2019 policy would be no less favourable than the preceding 2018 policy. The claimants contended that Generali failed to include this term in the policy as issued in September 2019, and sought rectification to add it.
The negotiations took place over several days in late June 2019. On Monday 24 June, Humphries telephoned the claimants’ broker, Robert Litchfield of Aon UK, indicating Generali would move to a new policy wording at renewal and discussing whether a conformity term might be included. On 26 June, Humphries sent a new policy draft and quote. Litchfield replied asking whether they had agreed to “a clause to cover anything that would have been covered under the existing wording but isn’t catered for in the new wording.” Humphries responded that Generali could include “a Conformity Clause (wording to be agreed).” The parties then exchanged further emails on 27 June. On 28 June at 15:22 hrs, Litchfield confirmed renewal, stating “Formal binding instructions to follow on Monday”; Humphries replied at 15:33 hrs, “Many thanks for renewal confirmation.”
The Court’s Holding
Justice Andrew Baker held that the rectification claim was “obviously unsustainable” and dismissed it on multiple grounds. First, the court found that the binding contract of insurance was concluded by the email exchange on 28 June 2019, when Litchfield confirmed renewal and Kemp accepted that confirmation. The earlier email exchanges on 26–27 June were merely part of the negotiation process, not expressions of a concluded conformity term.
Second, the content of those negotiation emails did not support the claimants’ allegation. When Litchfield asked whether they had agreed to a conformity clause, Humphries’ response—”wording to be agreed”—showed the parties were still proposing terms, not confirming an agreement already reached. The language contemplated future agreement on specific wording, not present acceptance of a binding commitment. The judge noted this was inherently a discussion about whether there *might be* such a clause, not about whether one had been agreed.
Third, the judge found credibility and factual obstacles. Litchfield testified he believed he had secured a firm commitment, but the judge concluded this was likely a “major over-interpretation” of the emails, coloured by knowing his long-standing client needed the conformity term for litigation. The underwriters from Generali who participated in the negotiations—Humphries, Richard Brown, and Matthew Cullen—had all left the company and were not called as witnesses, leaving gaps in the factual record about what was truly conveyed or intended.
The court also rejected the claimants’ pleading theory that there was an “outward expression of accord” continuing until September when the policy was issued. That framing, appropriate for rectification of a non-binding preliminary agreement, was inapt where the parties had concluded a binding contract in June and the policy was merely a record of that contract.
Key Takeaways
- Email exchanges proposing a contractual clause “wording to be agreed” do not constitute agreement to that clause; they signal ongoing negotiation, not concluded consent.
- For rectification to succeed where a binding contract predates the written policy, the party seeking rectification must prove by clear evidence that the term was actually agreed—not merely discussed or proposed—at the time the contract was concluded.
- In multi-party, multi-jurisdictional insurance renewals, the absence of evidence from key underwriters and decision-makers can be decisive against a rectification claim that rests on alleged oral or informal understandings.
- Conformity or “rollback” clauses—agreements that new policy terms shall be no worse than prior years’ terms—are known in insurance practice but must be unambiguously agreed and documented or included in the final policy wording to be enforceable.
Why It Matters
This judgment provides important guidance on the evidentiary threshold for rectification in insurance contracts and the distinction between proposal and agreement in renewal negotiations. Large policyholders seeking continuity of coverage across annual renewals cannot rely on informal understandings or email exchanges marked “wording to be agreed” to establish a conformity term; such language signals that the parties have not yet settled the precise commitment. For practitioners, the decision underscores the critical importance of documenting any conformity or term-rollback agreements explicitly in the final policy wording or in a formal endorsement, particularly when moving to new policy forms or when substantive changes to coverage terms are contemplated.
The case also reflects the practical challenges courts face when key participants in contract negotiations have departed and cannot be called to testify about intent or understanding. The absence of evidence from Generali’s underwriting team, combined with a broker’s potentially self-interested recollection, shifted the burden of proof in a way unfavourable to the claimants’ rectification claim. For international insurance brokers and multinational clients engaged in long-standing insurance relationships, the judgment counsels careful contemporaneous documentation of all material renewal agreements, particularly when there is any possibility of future dispute over the scope or continuity of cover.