Jurisdiction(s):
United Kingdom

COVID-19 business interruption cover beyond the FCA test case: construing unrepresented wordings, causation and policy areas, and insurer responses pending UK Supreme Court judgment

Published on: 14 December 2020

Published by a LexisNexis Insurance & Reinsurance expert

Legal News

Article summary

The first instance decision has been taken to the Supreme Court by the FCA, all but one of the insurer parties, and the Hiscox Action Group as interveners. The four-day appeal was heard in mid-November 2020. Should the judges be broadly aligned, a ruling may issue before Christmas; otherwise, early 2021 is anticipated. The Supreme Court’s judgment could finally determine how far the representative sample policies respond to coronavirus (COVID-19) business interruption losses. For policyholders with business interruption cover on other wordings not included in the test case, however, the position may remain less certain.

Traditional business interruption policies

Policyholders with traditional business interruption insurance—covering loss from damage to insured property—were likely advised that the prospects of coronavirus cover were poor. While coronavirus undoubtedly caused business interruption, it did not do so by causing damage to property. The prevailing view that such conventional cover is unlikely to respond to coronavirus-related business interruption, save perhaps in rare or exceptional cases, was confirmed in TKC London Ltd v Allianz...

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