The High Court has delivered its judgment in the Financial Conduct Authority’s (FCA)’s business interruption insurance test case.
Interesting times for the insurance sector this week as judgement day took place for the FCA business interruption test case which, on initial reading, seemingly landed in favour of the policyholder for the majority of key issues.
The background to the case is that many insurance policyholders whose businesses were affected by the Covid-19 pandemic suffered significant losses, resulting in large numbers of claims under business interruption (BI) policies. The FCA’s objective in bringing the test case to the High Court was to seek urgent clarification on key issues of contractual uncertainty for as many policyholders and insurers as possible.
Christopher Woolard, Interim Chief Executive of the FCA, commented:
“We brought the test case in order to resolve the lack of clarity and certainty that existed for many policyholders making business interruption claims and the wider market. We are pleased that the Court has substantially found in favour of the arguments we presented on the majority of the key issues. Today’s judgment is a significant step in resolving the uncertainty being faced by policyholders. We are grateful to the court for delivering the judgment quickly and the speed with which it was reached reflects well on all parties”
You can read the FCA’s full response here.
Griffiths & Armour are currently reviewing the findings of the judgment and on further developments as they occur, including awaiting the response of Insurers to the judgment. We will be assessing the potential impact for our clients and will be communicating further updates and guidance when they are available.
In the meantime, we welcome any questions or queries that you may have, please get in touch with your usual Griffiths & Armour broker or point of contact. Alternatively, you can send your question to our Head of Claims, Andrew Taylor.