Covid-19 Updates

The FCA filed a 'test case' in relation to Business Interruption cover.

Business Interruption FCA Test Case Update

November 2020

The Financial Conduct Authority (FCA), our industry regulator, filed a ‘test case’ with the courts in relation to disputed claims for non-damage business interruption cover, where the relevant coverage clause in the policy may have be unclear, or open to multiple interpretations. The FCA included sixteen example coverage clause wordings from a range of Insurers, to enable them to obtain a judgement affecting as many disputed claims as possible, even those with Insurers not included in the case itself, but whose wordings are similar.

The Insurers involved have exercised their right to appeal which has been fast-tracked and is now being heard by the Supreme Court, with some Insurers stating they will not be changing their stance on declined COVID-19 claims until this appeal hearing has been held.
For clarification, policies which include a list of ‘notifiable or communicable diseases’ that does not include Coronavirus or Covid-19 were NOT included in this test case and those policies therefore do not provide cover for losses arising from the current pandemic closures. The vast majority of policies we have reviewed include a list of specified diseases which do not include COVID-19. In such cases, the position remains that there is unfortunately no business interruption cover, irrespective of the outcome of this test case appeal.

As we learn more about developments we shall keep you informed but if you have any further queries, then please do not hesitate to contact us.