FCA Business Inerruption Ruling And Its Impact On Canadian Claims

Case Background

On September 15, 2020, the High Court of Justice rendered its judgment in a test case brought by the Financial Conduct Authority (“FCA”) to determine whether various policies held by small businesses would cover business interruption-related losses due to the COVID-19 pandemic. The case was heard over a two-week period commencing July 20, 2020.

The FCA commenced the proceedings in June 2020 by the FCA with the view to obtaining the maximum possible clarity with respect to business interruption claims arising from the COVID-19 pandemic in the context of a standard form business policy wordings.

The Court considered a total of 21 “lead” policies and estimated that 700 types of policies over 60 different insurance companies would be affected by this decision given the similarity of the wordings. Each of these policies contained: