The financial impact of government enforced lockdowns on companies during the pandemic continues to be of significance in the legal world. Most recently, the well-known high-street bakery, Greggs, brought forward a claim to the Commercial Court against Zurich insurance plc over insurance pay-outs in the form of business interruption losses (BIL). This claim was held alongside similar cases including Various Eateries Trading Ltd v Allianz Insurance Plc and Stonegate Pub Company Ltd v Ms Amlin and others.


Greggs claimed that it suffered business interruption losses of an estimated £150m plus as a result of closing during the pandemic and that it could recover these losses under its insurance policy with the defendant which chiefly insured the claimant against ‘Business Interruption – Specified Causes’.


We previously covered another case from the Covid era which was held by the Court of Appeal: Bank of New York Mellon (International) Limited v Cine-UK Limited and London Trocadero (2015) LLP v Picturehouse Cinemas Limited & ors. You can read this case here (insert link).


Greggs plc v Zurich Insurance plc is of utmost significance when it comes to the treatment of aggregate pandemic losses in cases, given the size of the company and the knock-on effect of other insurance schemes as a result of the Covid pandemic.


Keep reading to find out the outcome of this particular case and how it could impact similar cases.




Edward Hands, CC BY-SA 4.0 <>, via Wikimedia Commons

Greggs is a popular food-on-the-go retailer, perhaps best known for its sausage rolls and other baked goods. With 2,235 stores in the United Kingdom, 1,778 of which are in England, Greggs employs approximately 25,000 people overall.


The bakery chain closed its shops during the pandemic and suffered business interruption losses as a result. This is not in doubt. They closed their stores between 25th March 2020 until late May 2020, however Greggs also contends that further restrictions imposed in the UK as well as the effects of the disease resulted in further business interruption losses.


Nevertheless, the dispute between the claimant and the defendant arose over whether the losses should be attributable to a single business interruption loss or multiple business interruption losses.  Greggs made the case that they were entitled to £2.5m each time Westminster or the devolved governments decided to adopt a major Covid restriction measure. This constituted 120 different announcements and measures in total.


The defendant, Zurich Insurance Ltd, contended that the claimant’s Business Interruption Losses should be aggregated as one Single Business Interruption Loss, making the argument that the interruptions were in connection with a ‘single occurrence’. This would limit the liability to £2.5m, well short of the £150m which Greggs has made a claim for.


The Defendant also argued that as they had paid a sum of £2.5m to the claimant in January 2021, they therefore were not obligated to indemnify the claimant.




The Judge rejected the argument made by Zurich Insurance that there was just a single occurrence under the insurance policy during the period 2020-2022. This would have entitled Greggs to just £2.5m.


Nevertheless, the Judge decided that a major part of Greggs’ losses during the first Covid-19 lockdown in March 2020 were in fact connected with a ‘single’ occurrence. This part was therefore subject to the £2.5m limit.


However, material changes made to Covid restrictions later in the year did constitute separate occurrences, according to the Judge. In addition, he also ruled that there were separate occasions in each jurisdiction when local lockdowns or other restrictions were imposed.


The decisions made by the Judge did however have some beneficial outcomes for the defendant, Zurich Insurance plc, given that the Judge ruled that the industry could deduct furlough support from payouts.


Following this outcome, the case will now move to phase two, subject to appeal. Insurers and Greggs will subsequently calculate the value of the Business Interruptions loss under the policy of the bakery chain.


Our comments


The outcome of this case is a clear rejection of the idea that the Covid-19 lockdowns and restrictions constitute a single business interruption loss. Nevertheless, Zurich Insurance will feel somewhat compensated by the fact that the judge ruled that the industry could deduct furlough support from payouts. Given the possibility of Zurich appealing before the case proceeds to phase two, it remains to be seen who comes out on top between Greggs and Zurich, however for the time-being the case will provide some clarity to the area of indemnity for business interruptions losses.


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