Summary
The High Court's recent judgment1 in a
test case brought by the Financial Conduct Authority
(“FCA”) in relation to certain
non-damage business interruption
(“BI”) insurance policies found that
most (but not all) of the relevant policy wordings the court
considered would cover losses related to the 2019 coronavirus
pandemic (“COVID-19”), bringing some
clarity as to when insurers will have to pay out for COVID-19
related business losses.
Background
Many businesses have suffered significant losses as a result of
COVID-19 resulting in a large number of claims under BI insurance
policies. Most SME insurance policies only have basic cover for BI
as a consequence of property damage, but some policies also provide
cover for BI losses from other causes (including notifiable
diseases and denial of access as a result of non-damage). While
insurers have accepted liability under some of these
‘non-damage' BI policies, there are a number of
outstanding disputes and
