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FCA business interruption test case – Supreme Court verdict is in

On the 15th January 2021, the Supreme Court handed down their judgement in relation to the application of specific business interruption clauses and the question of whether these clauses respond (or not) to Covid-19 losses.

Whilst all parties are still reviewing the full judgement and how it applies to every affected customer, we must be mindful of the fact that different insurer wordings and the individual circumstances of each claim will require further assessment on their own merits, which may result in different outcomes.

In the judgement the Supreme Court substantially allowed the FCA’s four appeals brought on behalf of policyholders and dismissed the insurers’ appeals. Click here to see the FCA’s press release and here to see the Table of High Court and Supreme Court outcomes by policy type.

The decision goes some way to providing certainty on the nature and scope of cover provided under the sample policies analysed in the test case and it also provides clarity on the application of trends clauses.

This judgment does not, and indeed was not intended to provide all the answers to policy coverage for all COVID-19 BI claims and that there will likely be more debate on the subject to come.

Arlington will continue to closely monitor the situation and provide updates as they are released. If in the meantime you wish to discuss this matter or notify us of a potential claim for your insurers consideration please do not hesitate to contact us.