”Event” aggregation wording considered in reinsurance claim

In WRBC Corporate Member Ltd v AXA XL Syndicate Ltd and others [2026] EWHC 939 (Comm), the High Court held that the word "event" in the limits clause of two multi-line excess of loss reinsurance treaties referred to the causative government measure restricting public gatherings during the Covid-19 pandemic, not to the individual cancelled conference or exhibition. 

The decision enables the reinsured, WRBC Corporate Member Ltd (WRBC), to aggregate its Covid-19-related losses by jurisdiction (across six US states and England), reducing the number of deductibles applicable. The Court rejected the Reinsurers' construction which applied a separate deductible to each of the 174 individual losses.

BACKGROUND

WRBC was reinsured under two multi-line excess of loss reinsurance treaties for the 2019-2020 year of account (together, the Treaties) by the Reinsurer Defendants.  Both Treaties were in materially the same terms and covered the same six classes of business, including Class B (Contingency) which was the relevant class of business for the underlying insurance claims. The Treaties were structured in three layers with a USD 1 million deductible for Class B (Contingency). 

WRBC claimed against its Reinsurers for losses which arose from its settlement, as insurer, of claims by insureds whose conferences and similar events were cancelled due to Covid-19 restrictions preventing large public gatherings. For the purposes of its reinsurance claim, WRBC aggregated all the losses in each jurisdiction, arguing that they arose from a single causative event – the relevant governmental measure or measures restricting gatherings.

The Reinsurers disputed this. They contended that "event" in the Limits Clause in the Treaties attracted the Class B definition of "Any One Event" (AOE), contained under the ‘Conditions’ section of the Treaties. The definition read: 

"It is agreed that 'Any One Event' is to mean any one Conference or Exhibition or Convention or any other 'Event' accepted by the Reinsured including the period of installation or dismantling and arrangements directly connected with the 'Event'." 

On that basis, the Reinsurers argued that each individual cancelled conference would attract its own USD 1 million deductible, with the result that, since most of the 174 losses were below USD 1 million, the Reinsurers would have little or no liability for the majority of the losses.

DECISION

The High Court had to determine two key questions: 

• What was meant by the term ‘event’ in the Limits Clause? (the Construction issue); and
• What was the causative event for each of the 174 losses? (the Aggregation issue).

The Construction Issue

The Limits Clause applied across all layers and classes and read: 

"Ultimate Net Loss each and every loss, any one risk, or each and every loss or series of losses arising out of one event." (emphasis added)

The Court resolved the Construction Issue in favour of WRBC and held that "event" in this clause meant the event which caused the relevant losses, rather than the terms of the AOE definition. In doing so, the Court first analysed the text of the Treaties as follows:

• Natural causal meaning: "Arising out of one event" is a well-established aggregation expression importing causative meaning. Lord Justice Popplewell's analysis in Sky UK Limited v Riverstone Managing Agency Limited [2024] EWCA Civ 1567 confirmed that "any one event" is "a classic term for aggregation of losses by reference to the cause of the losses”.
• Absence of the words “Any One Event” in the Limits Clause: The Limits Clause did not expressly use the phrase “Any One Event”. It made an express cross-reference to the Definitions section for the term "risk" but made no equivalent cross-reference for "event". This omission added weight to the conclusion that the “Any One Event” (AOE) definition was not intended to govern the Limits Clause. 
• Inconsistency within Class B: Applying the AOE definition to the Limits Clause would produce results which made no sense for other elements of contingency which are covered by Class B and to which a "conference or exhibition" definition could not sensibly be applied. Further, on the Reinsurers' case, “event” would serve a fundamentally different purpose in the Limits Clause for Class B than for every other class.  Rather than defining the basis for aggregating multiple losses, it would define the subject-matter of the insured peril. The Court found this a surprising result, given the well-known function of aggregation clauses in reinsurance. 
• Commercial purpose of the excess layers: Absent aggregation, there would be little commercial reason for WRBC to have purchased the excess layers of reinsurance in respect of Class B because many losses would not reach them. On the Reinsurers' case and in the absence of aggregation, only 40 of the 174 losses would have reached the deductible at all, let alone the excess layers. The Court noted that Class B was the class most likely to be affected by a catastrophic event and so it would be “especially odd” if there was no real likelihood of the excess layers ever being engaged in respect of this class alone. 
• The Cross-Class Deductible Provision: A Cross-Class Deductible Provision was introduced by an endorsement to address the fact that Class A (Fine Art) was subject to a different deductible and losses may arise from a single event that affected both Class A and other classes including Class B (Contingency). That provision used the phrase “loss event”, which was plainly causal in meaning and it was common ground that the AOE definition could not apply to it. The Court found it very difficult to see how inter-class aggregation involving Class B (necessarily based on a causative event) could be permissible, while intra-class aggregation within Class B alone was not. The Court also noted that the use of "loss event" in the Cross-Class Deductible Provision reinforced the natural meaning of the word "event" in the Limits Clause.
• Redundancy of the AOE definition: The Court dismissed the Reinsurers' contention that WRBC's construction would render the AOE definition redundant, noting that such surplusage arguments hold limited persuasive value in the context of contracts where wording is frequently carried over from earlier iterations without ensuring complete consistency.

The Court preferred WRBC’s interpretation of the word “event” on the basis of textual analysis alone but went on to consider the factual matrix as well and concluded as follows:

• Placing submissions: The Treaties made express reference to the 2019 placing submissions which referred to catastrophic events in the context of losses on WRBC’s Contingency business. The Court found that the placing submissions were relevant to the nature and extent of claims that would be contemplated under the Treaties. It was noted that it would make no sense to include references to “catastrophe” events in this context if the events were unlikely to lead to substantial claims utilising all three layers of reinsurance (which was the effect of the Reinsurers’ construction argument because losses arising from the same causal event would not be aggregated). 
• Earlier treaties: WRBC contended that the formation and history of its earlier reinsurance treaties showed (1) that the AOE definition was an “inapt relic” from its original use in a 2015 reinsurance treaty when WRBC first embarked upon a structured reinsurance for all its classes of business which had been copied across into different treaties through the years, and (2) objectively the parties knew the Treaties were intended to cover “catastrophe” losses through aggregation. The Court agreed and found that the submissions and correspondence from 2015-2018 provided contextual support for WRBC’s case. 

Taking all these matters together, the Court preferred WRBC's interpretation of “event” and concluded that "event" referred to a causal event leading to the losses.

The Aggregation Issue

Having succeeded on construction, WRBC then had to establish that within each of the seven jurisdictions, there was the same measure (or group of measures) which caused each of the individual cancellations.

The Court did not hear oral arguments on each of the 174 losses. Rather, detailed submissions were given by the parties on each of the losses claimed in two of the jurisdictions – California and England – which the Court said should exemplify its approach for the other five jurisdictions. This article draws out the general findings of the Court rather than consider the Court’s conclusions in relation to each of the individual losses.

It was common ground that there must be a "significant" rather than merely a "weak" causal connection between the event and the cancellation giving rise to the loss, although the event does not need to be the only or proximate cause. The Court considered the principles on aggregation set out by Mr Justice Butcher in Stonegate Pub Co Ltd v MS Amlin Corporate Member Ltd [2023] Lloyd's Rep IR 672, as approved by the Court of Appeal in Various Eateries Trading Ltd v Allianz Insurance plc [2024] 1 Lloyd's Rep 490 and found that:

• It is not necessarily the measure which immediately precedes the relevant cancellation which is the event that caused it;
• The fact that a later measure continued an earlier measure does not deprive the earlier measure of its causative force. Measures that merely continue existing restrictions without marking any significant change will not constitute a separate "single occurrence" for aggregation purposes; 
• A measure that simply reduces existing restrictions, which would be expected to reduce losses rather than cause them, cannot constitute an operative event; and
• A bare declaration of a state-wide state of emergency, without specific restrictions, is insufficient as a causative event.

One issue which arose in the case was whether WRBC could recover losses for events which were cancelled or postponed prior to the date of the final measure relied upon by WRBC. WRBC argued that, in some cases, the fact that a relevant cancellation occurred before a particular measure did not mean that such a measure could not be relied upon as causing the cancellation if the subsequent measure was imminent or could be seen as inevitable – given that in some cases, there had been a declaration of a state of emergency. The Court noted that the words “arising out of” one event in the Limits Clause suggested that the event must precede the cancellation. While the Court acknowledged that the announcement of a particular measure to take place at some future date (which would prohibit a conference taking place), might itself constitute a relevant causative event from which the later measure followed, this was not the case for a more general declaration of a state of emergency which could not itself constitute a sufficient causative event from which future measures would follow. 

Applying these principles, the Court found that most California losses were caused by an announcement by the Governor on 11 March 2020 which limited gatherings of more than 250 people, and most of the English losses were caused by the UK Government’s 16 March 2020 decision to instruct the public against unnecessary social contact of all kinds (including mass gatherings) (consistent with the findings in Stonegate). Overall, the Court found that the vast majority of the 174 claims were within the scope of cover, most of which were aggregated with other claims in the same jurisdiction.

COMMENT

The case is a useful reminder of the principles of construction applicable to insurance contracts. As a starting point, insurance contracts are to be construed objectively in accordance with the ordinary principles of contractual construction by asking what a reasonable person, with all the relevant background knowledge available at the time of contracting, would have understood the contract to mean (see FCA v Arch and Others [2021] UKSC 1). That said, certain issues tend to arise with regularity in the context of insurance and the judgment helpfully looked at a number of these:

• “Pick and mix” – where the policy has used a selection of different clauses from other policies without any attempt to ensure the language is consistent, the courts have found that the inference that terminology has been used consistently throughout “has little force” (International Entertainment Holdings v Allianz Insurance Plc [2024]).
• Surplusage – an argument based on surplusage or redundancy is not conclusive. It is just one factor and may, in fact, be unreliable.
• Corrective construction – this allows a court, in circumstances where something has gone wrong with the language, to interpret a contract in context to get “as close as possible” to the meaning which the parties intended (Chartbrook v Persimmon Homes [2009]).  This is part of the construction exercise, as opposed to a separate process of correcting mistakes, or a summary version of rectification. There must be a clear mistake in the language or syntax of the contract, and it must be clear what the correction should be. 
• Relevance of the history of a policy wording – the Court was clear that in this case such history was relevant to the admissible factual matrix (relying on Unipol Assicurazioni SpA v Covea Insurance [2025]).

The case also confirms the application of relevant “event”-based aggregation principles to Covid-19 business interruption claims in a reinsurance context.

Permission to appeal has been granted.