Today the Supreme Court handed down its judgment in the Covid-19 Business Interruption insurance test case which was initiated by the Financial Conduct Authority (FCA). The original case considered 21 sample wordings from eight insurers and focused on the correct construction of certain non-damage business interruption insurance extensions and related clauses. The Appeal was fast tracked to the Supreme Court
The case was a resounding success for policyholders, who now have a clear avenue to recovery under such non-damage extensions. Roger Franklin, Head of Insurance Litigation commented:
“This is an important and keenly awaited decision for the many thousands of commercial policyholders seeking to recover losses caused by Covid-19. It’s been a desperate time for small businesses, and this positive judgment is like the arrival of a financial vaccine for them. The FCA is to be commended for taking the initiative in clarifying these issues, as are the lawyers involved and the Court system for bringing the case to such a swift conclusion.
It’s also important to recall that the potential claims considered in the judgment arose out of the first lockdown. There have since been two more lockdowns, so the financial hit to the insurance industry will be significant.
From an insurance litigation perspective, the decision is highly relevant not just in the context of the current pandemic, but for the cover provided for general wide area damage claims, and insurers will no doubt be reviewing policy wordings and special circumstances clauses over the coming weeks.”
Edwin Coe LLP specialises in representing policyholders against Insurers and was proactively engaged advising a number of the Claimant groups in the FCA test case.
If you have a claim which you think should be pursued as a result of this decision, please contact our Insurance Litigation team and we can advise your available options.
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