Original media coverage suggested that business interruption insurance would not provide cover for losses in relation to Covid-19.  In our previous article here we cast doubt on this message and urged operators to check their policies carefully.

FCA bring test case in High Court

A decision of the High Court yesterday was a victory for a significant number of policyholders.

The Financial Conduct Authority (FCA) brought a test case on behalf of policyholders asking the Court to look at 21 different policy wordings in 3 categories – disease wordings, prevention of access/public authority wordings and hybrid wordings. The Court reached different conclusions on each policy wording and brings welcome guidance on how these should operate in the context of Covid-19.

In the light of the number of businesses and jobs that currently hang in the balance the FCA has urged insurers to reflect on the judgment and now “progress claims of the type that the judgment says should be paid”.

Specific policy wording

Your policy wording may be affected by the High Court decision however, you will need to take specific advice in the light of this complex decision and the way that the UK Government’s advice and Regulations affected your business. For example, whether cover under a prevention of access clause is available may turn on whether your business was directly mandated to close. A restaurant that offered sit-in only food might be in a different position to one that offered sit-in and takeaway before 26th March.

Contact Freeths insurance specialists Adam Edwards or Daniel Meyer for further assistance.


The content of this page is a summary of the law in force at the present time and is not exhaustive, nor does it contain definitive advice. Specialist legal advice should be sought in relation to any queries that may arise.