The Supreme Court handed down judgment on Friday 15 January 2021 relating to the Covid-19 Business Interruption insurance test case (The Financial Conduct Authority v Arch and Others). The Court allowed the FCA’s appeals (albeit qualified on two of them) and unanimously dismissed the Insurers’ appeals from the earlier High Court judgment (about which we wrote in our post in September 2020).
The ruling clarifies certain provisions covering complex issues such as disease clauses (whether the policy was triggered by a notifiable disease within the vicinity or a defined area), whether businesses were denied access to their properties, hybrid clauses (restrictions on premises linked to the occurrence or manifestation of a (notifiable) disease), and the timing of lost earnings. The judgment means that for many policyholders – thought to number around 370,000 – there will be cover for business interruption losses as a result of the first lockdown in March 2020. Indeed, the insurance industry is now expected to pay out over £1.8 billion in total for Covid-19 claims.
Whilst the judgment has come quickly to resolve some of the uncertainty in business interruption insurance cover, less than nine months since the FCA announced its intention to obtain a court declaration, it is hoped that this “lifeline” is not too late for businesses affected by the pandemic.
At Quastels, we are committed to supporting businesses who have been affected by Covid-19 and require expert legal advice and representation. Please contact Robert Kay, head of the Litigation and Dispute Resolution team, on 020 7908 2525 if you require further assistance.
Please note – this article does not constitute legal advice.