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15 January 2021

Supreme Court Judgment – FCA case on Business Interruption Insurance


The Supreme Court has handed down its judgment in the Financial Conduct Authority’s (FCA) covid-19 business interruption insurance test case, ruling largely in favour of policy holders. The Supreme Court unanimously dismissed Insurers’ appeals and allowed all four of the FCA’s appeals. The Supreme Court also determined that the Orient Express case was “wrongly decided”.

The Supreme Court judgment followed a leapfrog appeal from the High Court in September 2020 which considered 21 different sample policy wordings from 8 different insurers. The High Court proceedings were brought by the FCA to bring about clarity on the interpretation of contractual provisions contained within business interruption insurance policies and other causation issues in the context of covid-19.  

The Supreme Court has ruled that cover may be available for partial/full closure of premises and for mandatory closure orders that were not legally binding; that valid claims should not be reduced because the loss would have resulted in any event from the pandemic; and that two additional policy types from insurer QBE provide cover.

The FCA have stated that they will be “working with insurers to ensure that they now move quickly to pay claims that the judgment says should be paid, making interim payments wherever possible”.

The judgment will bring positive news for policyholders who have suffered losses as a result of the covid-19 pandemic, and who will now have their claims for coronavirus-related business interruption losses paid.



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