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Allianz has fought off a legal challenge brought by a UK university after the insurance company refused to cover damage done by a controlled explosion on the grounds it fell within a “war exclusion” clause.
The Court of Appeal on Thursday ruled in favour of Allianz over its decision not to pay out after a British Army bomb disposal team destroyed a 1,000kg device that was dropped by the Nazis in 1942 and lay buried on the outskirts of Exeter, Devon.
Workers on a construction site two years ago unearthed the bomb — nicknamed “the Hermann” after German commander Hermann Göring — and the controlled detonation was so powerful it damaged nearby student halls of residence.
The University of Exeter claimed under its insurance with Allianz both for physical damage and for costs related to the temporary rehousing of students.
But the Munich-based insurer refused to pay out. A High Court judge earlier this year sided with the company, agreeing that the war exclusion applied on the basis that the dropping of the bomb during the war was the “proximate cause” of the damage.
The university challenged the decision, noting that the second world war ended 76 years before the damage was done.
David Pliener KC, representing the university, said it was not plausible to argue that the war exclusion could apply to “long-ended historic wars” and that the only direct cause for the damage was the Royal Logistic Corps’ intervention.
Isabel Hitching KC, for Allianz, argued that the events since the dropping of the bomb were immaterial compared with the Luftwaffe raid, especially since the explosive ordinance disposal team’s actions had not been criticised.
In the ruling on Thursday, Lord Justice Coulson said the “effluxion of time did nothing to reduce the potency of the bomb”.
The judge said that both the act of war in 1942 and the bomb’s subsequent detonation decades later had caused the university’s loss, and that since one of those causes was expressly excluded from cover, Allianz was within its rights not to pay out.
The bomb was dropped during the so-called Baedeker raids, in which the Luftwaffe targeted historic British cities. It fell on to farmland on the outskirts of Exeter and the halls of residence were built on the site about a decade ago.
