In June, we shared an article on the issue of the Financial Conduct Authority’s (FCA) test case regarding Business Interruption insurance policies (if you missed it – click here). As mentioned in that article, many insurers have been reluctant to pay out on business interruption policies as they state that the terms of the policies do not cover COVID-19 related events.
The purpose of the test case is to obtain a declaration from the Court as to how the wording of these policies should be interpreted by insurers when deciding whether or not to pay out. It is thought that the outcome of the test case will affect approximately 370,000 policies.
The following insurers have agreed to be part of the test case:
The test case was issued in June 2020 and has already been heard by the High Court. The trial lasted 8 days at the end of July where the FCA and intervenors, Hospitality Insurance Group Action (HIGA) and Hiscox Action Group, made submissions on behalf of policyholders and the eight Defendants also made their submissions. You can view the transcripts from each day of the hearing on the FCA’s website.
A decision is yet to be released but the court has suggested that this will be available by mid-September. It is likely that any decision will be appealed and it has already been agreed that any appeal will be heard on an expedited basis which includes the possibility of a “leapfrog” straight to the Supreme Court to reduce any delay as much as possible.
We will provide a further update once the Court’s decision has been released.