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Businesses affected by Covid-19 will no doubt have been in touch with their insurers over the course of the last year in relation to business interruption insurance. The government-imposed closures of non-essential businesses led to the FCA bringing a test case against several insurance firms in order to confirm how certain relevant clauses, such as disease and prevention of access clauses, in insurance policies would be interpreted by the courts as regards Covid-19. This action was taken in order to assist businesses and insurers with the prompt settlement of insurance claims arising from the Covid-19 pandemic.

The test case was initially heard in the High Court. The first judgment handed down in September largely found in favour of the FCA’s arguments that a number of standard business interruption clauses would provide cover where businesses had been affected by Covid-19. Following an appeal by the insurers, the Supreme Court handed down a judgment on 15th January 2021 dismissing the insurers’ appeals and confirming the position taken by the High Court.

Insurance claims are notoriously complicated. The Supreme Court’s judgment provides welcome guidance to both policyholders and insurers and it is hoped that this will create an easier path to settling Covid-19 related business interruption claims.

The FCA estimates that the decision will affect some 370,000 policyholders. Of course, not all policies are the same and the test case could not deal with every example of policy wording. If you are concerned about a Covid-19 related business interruption claim or are having difficulties with your claim, please do not hesitate to contact our litigation team.

Subir Desai, Partner


Francesca Robson, Solicitor


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