Supreme Court Passes Judgment on FCA’s Covid-19 Business Interruption Test Case

It has been almost one year since the Coronavirus pandemic began affecting us in the UK. Leaving the country in multiple lockdowns for the best part of 2020 and even now, continuing into 2021. The lockdowns and tier systems ravaged businesses across the country, leaving many business owners unable to pay overheads or staff. Although it seems, light is appearing at the end of the tunnel, with the anticipated Supreme Court ruling that occurred earlier this month.

Thousands of policyholders could be entitled to compensation from their Business Insurance due to coronavirus damages. The Supreme Court has significantly allowed the Financial Conduct Authority’s appeal for policyholders who have the Business Interruption (BI) clause.

On Friday 15^th January 2021, the Supreme Court delivered its judgment in the FCA’s business interruption insurance test case. Completing the legal process for impacted policies means that thousands of policyholders can now have their claims for COVID-19-related business interruption losses paid by insurers worth at least £1.2bn.

The FCA aimed to achieve clarity for all parties, as quickly as possible, removing many of the claimer’s roadblocks. Tens of thousands of small businesses and hundreds of thousands of jobs receive the news of the Supreme Court’s quick decision with a sigh of relief. Most SME insurance is focused on property damage however, some policies include cover for infectious or notifiable diseases and prevention of access and public authority closures or restrictions. Back during the first national lockdown, many insurers disputed the claims under lack of clarity. The FCA’s appeal argued that that the ‘disease’ and ‘prevention of access’ clauses provide cover in the circumstance of the coronavirus pandemic. The judgment finishes legal arguments for fourteen different types of policies from six insurers, as well as many similar policies in the market, that now lead to claims being successful. The judgment does not determine how much claimants can be paid, however, provides much of the basis for doing so. The FCA will be working with insurers providing interim payments to policyholders that the Supreme Court has said should be paid.

For claims, every policy will need to be considered individually against the judgment, working out the outcome for each one. A draft can be presented to insurers that specifically detail policy wordings and using evidence to support the claimant’s case.

At Leonard Solicitors, we have the skillset and know-how to analyze your Business Interruption policy and present the correct evidence in ensuring your claim is successful. For more information about our COVID-19 Business Disruption Claims, click here or contact us via our web portal.

Disclaimer: Information on this webpage is not intended for legal purposes or advice. If you require legal advice or services you should seek a professional legal practitioner.