The Supreme Court has delivered its judgment in the FCA’s business interruption insurance test case. The Court has found in favour of the FCA on many of the issues, which means many of the clauses which were subject to the appeal will provide cover for the business interruption caused by Covid19.
In its statement the FCA stated:
The High Court’s judgment last September said that most of the disease clauses and certain prevention of access clauses (12 policy types from the sample of 21, issued by six insurers) provide cover and that the pandemic and the Government and public response caused the business interruption losses. The six insurers appealed those conclusions for 11 of the policy types, but the Supreme Court has dismissed those appeals, for different reasons from those of the High Court.
The test case didn’t involve all disputes but sought to resolve some key contractual uncertainties and ‘causation’ issues to provide clarity for policyholders and insurers. Each policy wording will need to be reviewed against the judgement, to work out what it means for that policy. The FCA will now work with the Supreme Court and Insurers to help progress the work required, in order to provide clarity to policyholders and for valid claims to be paid as soon as possible.