It is certainly the end of the actions raised by the FCA.
Those actions sought to clarify legal arguments under 14 types of policy, and a selection of policy wordings, issued by six insurers. The Supreme Court ruling was handed down on 15 January 2021 and is largely in favour of policyholders receiving payments from business interruption insurance policies. It brings the FCA action to an end as well as providing guidance for a wider pool of 700 policies.
This ruling dismisses the appeals against the High Court's judgment in September 2020. It supports that most of the disease clauses and certain prevention of access clauses reviewed in the action provide cover; and that the pandemic, and the Government and public response, caused the business interruption losses.
This puts to bed arguments about the cause of businesses losses, so businesses with insurance policies which fall within the definitions discussed in the test case can now look to receive payment for business interruption losses arising from the Covid-19 pandemic.
A word of warning
The decision does not necessarily guarantee a pay-out. Each policy must be considered against the judgment, which is complex, detailed and lengthy, to work out what it means for any claim. Policyholders must also provide evidence of the lost profits underpinning any claim and continue to adhere to any other policy conditions.
What happens next?
Businesses which have previously had a business interruption claim refused should review the position again in light of this decision. If you are unsure about your policy, or whether its terms might now trigger a payment under the Supreme Court decision, your insurance broker may be able to advise. Alternatively, you can contact us to discuss your policy and how the recent decision might affect you.