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Business interruption: new interpretation of the concept of‘impossibility of access’ by the Cour de cassation (French SupremeCourt)
In two new rulings handed down by its Second Civil Division (28 May 2025, no. 23-20.093 and no. 24-11.006), the Cour de cassation has settled two disputes concerning the interpretation of business interruption cover. The high court gave a new interpretation of the condition of impossibility of access contained in this cover, in line with two decisions handed down a year earlier.
One case follows another, but no two are alike. Five years after the covid-19 health crisis, disputes relating to operating losses are arriving on the desk of the Cour de cassation. So far, only certain insurers have been found liable by the high court, but two new rulings have given a new interpretation of the concept of banning public access to restaurants.
Refusal of cover by the insurer…
The two cases in question pitted restaurant owners against their professional multi-risk insurer, the Assurances du Crédit Mutuel (ACM) group. The policies they took out included ‘business interruption’ cover. The restaurant owners applied for this cover because of various measures prohibiting restaurants from welcoming the public for several periods, but their insurer refused. The insurer took the view that cover could only apply where access to the operators’ premises was impossible.
… upheld by the Court of Appeal.
In rejecting the restaurant owner’s claims, the Court of Appeal held that the application of cover for business interruption ‘was subject to a prohibition of access, a clear concept that consists of an absolute prohibition on entering the insured premises and is not open to interpretation’. It concluded that the cover requested could not be called upon, since takeaway sales remained authorized.
In the other case, the Court of Appeal ruled that ‘the prohibition on access, which was not defined in the contract, should be understood as an absolute prohibition on anyone entering the premises’, which also excluded the insurer’s cover. The judges added that the concept of restriction of access was different from the concept of prohibition of access, which presupposes total and material impossibility of access to the premises, which was not the case in this instance.
Total and material impossibility of access to the premises is not required for the guarantee to come into play
In this case, the Cour de cassation takes a significantly different view of the concept of prohibition of access. In the first judgment, it ruled that the prohibition on receiving members of the public constituted, within the meaning of the contractual stipulation, ‘a measure issued by the administrative authorities prohibiting access to the premises in which the insured operated her business’. It also considered that the insurance policy provided cover for losses suffered as a result of the interruption or reduction in the insured’s business resulting from a prohibition of access issued by the administrative or judicial authorities, ‘without requiring total and material impossibility of access to the premises’.
Strengthening the position of policyholders
These two solutions are not so new insofar as they follow on from two rulings handed down a year earlier on the same issue. ‘The rulings handed down by the Court of Cassation in January and June 2024 may have have come as a surprise, but in the end they set the trend with regard to the notion of impossibility of access: the decrees issued during the covid period are very similar to closures for restaurants. If the clauses of the contract do not refer to ‘permanent closure’ or ‘total prohibition of access’, appeal court judges must not add conditions and insurers must guarantee operating losses’, explains Jérôme Goy, partner at Enthémis.
Some insurers had been able to invoke the fact that restaurant owners could operate a takeaway business as a reason for refusing to invoke their cover, but the High Court no longer seems to want to accept this argument: ‘With these two new rulings, the Court of Cassation has clearly reaffirmed the position against insurers. Some will perhaps try to invoke other clauses or other activities of their policyholders, but it’s not a guaranteed outcome’, warns Jérôme Goy.