It has been very interesting watching the FCA's business
interruption litigation playing out in the High Court this week.
Whilst arguments have been made across every aspect of the various
policy wordings that are under scrutiny, the key battleground has
been causation; did the closure of policyholders' premises
cause their losses, or would those losses have happened anyway?
The insurance market have strenuously argued that we must
compartmentalise the issues, and split premises closure from the
COVID-induced lockdown. As such, when assessing loss we should ask
the question 'what losses would you have suffered if your
premises had remained available during COVID?'. The FCA on the
other hand have said that this is not the right approach and that
the closure of premises and COVID should be viewed as one and the
same thing; as such, one should instead ask the question 'what
would your trading position have looked like if your premises had
remained available and COVID had
