Insurance - Supreme Court Business Interruption Ruling

Insurance - Supreme Court Business Interruption Ruling

On 15th January, the Supreme Court delivered its judgment in the Financial Conduct Authority (FCA) Business Interruption test case. The court substantially allowed the FCA's appeal on behalf of policyholders. The judgment ends legal argument under fourteen types of policy issued by six insurers and a substantial number of similar policies in the wider market, which will now lead to claims being successful. 

The test case focused on a small number of insurers, whose policy wordings were unclear or where a potential gap was identified. Therefore, the outcome of the case will not affect many policy holders with Business Interruption losses.

The test case was designed to resolve some key contractual uncertainties and 'causation' issues to provide clarity for several policyholders and insurers. The judgment does not determine how much is payable under individual policies but provides much of the basis for doing so. The ruling will force insurers to pay out to an estimated 370,000 businesses impacted by Covid-19.

The process for brokers will take time as they work to support clients. Our insurance partner, Tysers, is working to determine how their client policies are affected.  We will be liaising with those clients that insure via Tysers as soon as we have the required information to support them with their claims. 

The weeks ahead will be challenging as we work to absorb guidance from the FCA and liaise with insurers and clients to resolve their claims.

The challenge for policyholders (with the support of their broker), will be to prove they've got a claim under disease wordings and hybrid wordings. The FCA will be publishing guidance on how best to do this. They are also publishing a list of policies with claims that may be affected by the test case which will be an important point of reference for both brokers and policyholders.  

Click here for the FCA's further guidance for policyholders.

Should you wish to discuss anything in more detail our experts at Sopher + Co are here to assist. Please complete our online contact form, email us at or call 020 8207 0602.