The Supreme Court has ruled that the ‘vast majority’ of business interruption insurance policies will provide cover for losses incurred due to Covid-19 measures.
The judgement marks the end of a year-long case brought by The Financial Conduct Authority (FCA) on behalf of approximately 370,000 policyholders and upholds a September 2020 legal ruling which ordered insurers to honour most coronavirus-related business interruption insurance claims.
This was a test case brought by the FCA by selecting a representative sample of policy wordings issued by eight insurers. The case considered 21 different policy wordings which covered the majority of disputes between the insurers and policy holders.
The Supreme Court’s judgment means that 14 of the 21 types of policy included in the case may provide cover, along with a substantial number of similar policies in the wider market. It will be up to insurers to determine how much is payable under individual policies, based on the guidance in the judgment and further guidance to be published by the FCA, which is currently in draft form.
This opens the door for claims from businesses that previously attempted to make a claim on their business interruption insurance (as a result of the ongoing pandemic) which were refused. As a result of the ruling, those businesses may now wish to revisit their policy and challenge the claim.
The decision might offer opportunities for businesses which had claims accepted to receive higher pay-outs. Moreover the FCA has advised that the judgment may also have wider implications for other business interruption claims beyond the pandemic.
Our team can advise business owners in respect of business interruption claims. The above is only a summary and is not specific legal advice. If you need any advice on business interruption claims, please contact a member of our Corporate Team.
Andrew Cooper (firstname.lastname@example.org – 01284 717511)
Simon Ratcliffe (email@example.com – 01284 717426)
Neil Walmsley (firstname.lastname@example.org – 01284 717416)
Mark Daly (email@example.com – 01284 717500)
Mark Whittaker (firstname.lastname@example.org – 01284 717513)
Jonathan Hewett (email@example.com – 01284 717412)