FCA Business Interruption Insurance Test Case - Supreme Court Appeal

Following on from the FCA Judgment on the 15 January 2021, the outcome and implications are not yet clear however this is what we know.

The judgment brings to an end legal arguments under 14 types of policy issued by six insurers, and a substantial number of similar policies in the wider market which will now lead to claims being successful.

The test case was not intended to encompass all possible disputes, but to resolve some key contractual uncertainties and 'causation' issues to provide clarity for policyholders and insurers. Today's judgment does not determine how much is payable under individual policies, but provides much of the basis for doing so.

The FCA will now work with insurers so that they rapidly conclude claims that the Supreme Court has said should be paid, providing interim payments wherever possible.  

Each policy needs to be considered against the detailed judgment to work out what it means for that policy.

We will lodge a claim with your insurers

The FCA has published draft guidance for policyholders on how to prove the presence of coronavirus, which is a condition in certain types of policy. The FCA will issue finalised guidance as soon as possible. 

Policyholders who remain unhappy following their insurer's assessment of their claim may be able to refer their claim to the Financial Ombudsman Service, whose role is to resolve individual disputes.

The FCA will publish a set of Q&As for policyholders to assist them and their advisers in understanding the test case. The FCA will also publish a list of BI policy types that potentially respond to the pandemic based on data that we will be gathering from insurers.

The FCA will continue to keep policyholders appraised of matters as they progress, through its dedicated webpage.