January 15, 2021
FCA Supreme court ruling on Business Interruption Test Case
If you have a Business Interruption policy with Flint Insurance which could be affected by this ruling we will be in contact with you in due course.
The FCA brought this test case on behalf of policyholders who held policies that included extensions that were poorly worded and, in their view, offered the policyholder cover under the extension.
Following a Judicial review which broadly supported the case brought by the FCA, insurers challenged the findings in the Supreme Court.
What does this judgement mean?
That the insurers involved are legally bound to abide by the judgement of the test case.
Those clients who have a policy with one of the insurers that is included in the judgement will be able to present a claim to the insurer and, if they fulfil the terms of the policy, be eligible to claim.
The FCA have published the following update https://www.fca.org.uk/firms/business-interruption-insurance#latest-updates
“The High Court’s judgment last September said that most of the disease clauses and certain prevention of access clauses (12 policy types from the sample of 21, issued by six insurers) provide cover and that the pandemic and the Government and public response caused the business interruption losses. The six insurers appealed those conclusions for 11 of the policy types, but the Supreme Court has dismissed those appeals, for different reasons from those of the High Court.
On the FCA’s appeal, the Supreme Court ruled that cover may be available for partial closure of premises (as well as full closure) and for mandatory closure orders that were not legally binding; that valid claims should not be reduced because the loss would have resulted in any event from the pandemic; and that two additional policy types from insurer QBE provide cover. This will mean that more policyholders will have valid claims and some pay-outs will be higher.”
For a fuller explanation you can visit the FCA’s solicitors’ website: https://hsfnotes.com/insurance/2021/01/15/supreme-court-hands-down-judgment-in-fcas-covid-19-business-interruption-test-case/
Does this cover all policies that have Business Interruption?
No, this does not affect a majority of policies, as almost all insurers have clearly set out that there is no cover in such an extraordinary event and they have not included any extensions that give limited cover.
How do I find out if my policy does offer cover?
You can call and ask us or check your policy wording.
Those insurers involved in the review and Supreme court judgement are:
We have also found these covers in policies issued by Eaton Gate and Riva where these insurers provide the cover.
What do I do if I have a policy on the list and want to claim?
You can contact our claims team by emailing email@example.com
Confirm your company name.
That you wish to make a BI extension claim.
Give a brief description of why you are claiming – what lead to the claim, what had been the effect, how this has affected your business and what you believe the financial impact is.
You then need to consider what you will need to validate your claim. For example Audited Accounts for the period prior to the claim and during the claim. Evidence of any losses, such as lost orders or work that you have been unable to complete.
We will acknowledge your email and then contact you to discuss how best you can present the claim to the insurer and then ensure the insurer receives the claim notification.