If your business has been adversely affected by the restrictions brought about as a result of COVID-19 and you hold a business interruption insurance policy you may be able to make a claim in respect of your losses. The success of any such claim will depend on the policy wording which will dictate whether or not you are covered by your insurer.
In June 2020 the Financial Conduct Authority (FCA) issued a test case on behalf of policyholders against eight insurers following “widespread concern” over the lack of clarity for businesses seeking to bring claims for the losses incurred during the pandemic. The Court considered 21 representative policy samples to include notifiable disease clauses, denial of access/public authority clauses and hybrid clauses.
On 15 September 2020 the High Court handed down its judgment in this landmark test case. The Court ruled in favour of the FCA on the majority of key issues.
The case will have a significant impact on the business interruption insurance market as it provides the guidance that the market was in urgent need of. The case is likely to lead to many claims being upheld however, it is important to remember that each policy will be construed on its own wording and therefore should be considered carefully alongside the judgment.
If you think that you have a claim you should contact your insurance company. If you have already contacted your insurance company and the matter was put on hold pending the outcome of the test case, you should expect to hear from your insurer to explain the next steps.
It is worth noting that the insurers have been granted permission to a fast-track appeal to the Supreme Court. Your insurer may therefore seek to reserve the right to determine your claim until after the appeal has been heard. The appeal is expected to be heard by year-end. That said this does not preclude policyholders from seeking to settle their claims where possible.
A copy of the judgment together with regular updates can be found on the FCA’s website: https://www.fca.org.uk/publication/corporate/bi-insurance-test-case-judgment.pdf