Covid And Coverage In The UK: Language Matters

In a recent opinion, the UK Supreme Court has found coverage for business interruption as a result of business closures incident to the Covid-19 pandemic. While some may see that decision as support for coverage suits in the United States, the decision is a reminder why policy language is so important.

The UK Financial Conduct Authority ("FCA") was established on April 1, 2013 and is the conduct regulator for nearly 60,000 financial services firms and financial markets in the UK. The FCA brought a test case suing eight insurers with 21 policy wordings to reach an “authoritative declaratory judgment” concerning coverage for coronavirus-related business interruption losses. The test case addressed coverage under the so-called non-damage extensions to business interruption insurance.