Wednesday, January 20, 2021
FCA“) test case on non-physical damage business interruption (“
BI”) insurance has been the focal point for policyholders suffering from BI financial losses as a result of Covid-19.
The Supreme Court’s decision last Friday dismissed all of the insurers’ appeals, meaning tens of thousands of businesses will receive an insurance pay out to cover losses occurring during the UK’s first lockdown. The Court’s decision will affect around 60 insurers and 370,000 policyholders.
When this test case was brought by the FCA in 2020, many insurers had refused to pay out under the policies, arguing only the most specialist policies had cover for such unprecedented restrictions. The Supreme Court examined each of the disease clauses, prevention of access clauses and hybrid clauses in the context of the national lockdown measures.
Insurance Post
Insurance Post staff
Free content: Access market and insurance reactions to the Supreme Court ruling that dismissed appeals against a High Court judgment on insurers paying out in Covid-related disruption on business interruption insurance policies and overturned the Orient Express ruling.
The Supreme Court dismissed insurers’ appeals in the Financial Conduct Authority’s business interruption test case on Friday, bringing to a close a six-month legal battle.
The court also “substantially” allowed the appeal of the FCA, which had been representing the interests of policyholders in the case.
It also overturned the landmark 2010
Orient-Express Hotels v Assicurazioni Generali ruling, concluding that it had been “wrongly decided.” Insurers had argued that the High Court’s judgment undermined the precedent set by the ruling.