Dear Member


FCA Business Interruption Insurance Judgement

You may remember that the FCA has been seeking a court ruling on the validity of the Business Disruption insurance with regard to the Coronavirus Outbreak. This test case used a sample of 21 different types of policy wording from eight different insurers.

The judgement on this case has now been published and, in general terms, it represents a considerable step forward. While the judgment is long and complex for a number of reasons (including the fact that the wording of different insurance policies varies significantly) the FCA’s press release states that judgment concludes that most, but not all, of the “disease clauses” in the insurance policies considered, do provide cover for business.  It also says that certain “denial of access” clauses in the sample provide cover, but this depends on the detailed wording of the clause and how the business was affected by the Government response to the pandemic, including whether the business was subject to a mandatory closure order and whether the business was ordered to close completely.

The test case has also clarified that the Covid-19 pandemic and the Government and public response were a single cause of the covered loss, which is a key requirement for claims to be paid even if the policy provides cover. 

The FCA and Defendant insurers are now considering the judgment and what it might mean in respect of any appeal.  Any applications to appeal will be heard at a consequentials hearing before the High Court.  


Invitation to speak FCA legal team


The legal team has set aside time on 21 and 22 September to speak directly with policyholders and intermediaries and their legal advisers regarding this judgement. They will consider meeting requests made by 5pm on Thursday 17 September. A request can be emailed to stating only the word ‘Meeting’ in the subject line of the email and stating your availability in the body of the email. If you would like to talk about a particular policy, email the policy document as well as any correspondence from your insurer regarding whether your claim is potentially affected by the test case. 


Here’s a copy of the FCA Press release


And here’s a copy of a summary of the Judgement put together by the FCA’s legal team

Kind regards,


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