On 15 September The High Court gave judgment in the test case brought by the FCA against various insurance companies relating to the wording of Business Interruption Insurance policies.
The judgment is complex running to over 150 pages, but the good news is that the Court generally found in favour of the FCA.
Whilst the wording of your specific insurance policy will still have to be considered against the Court's judgment, the findings of the Court will likely mean that insurers arguments which they have so far deployed against paying out may not be upheld. Insurers have said that they will be contacting their policyholders within the next seven days.
The categories of policy wordings considered generally related to Disease, Prevention of Access/Public Authority Decision and Other wordings.
In relation to the Disease policy wordings, the Court decided that most but not all of the disease clauses considered, provide cover.
With regard to Prevention of Access or Public Authority decisions which led to businesses having to close, the Court's decision was that these clauses should be construed more restrictively. Hence, there needs to be a very close examination of the policy wording relating to losses caused by prevention of access and public authority decisions. Under these types of policy wording consideration will have to be given to whether a business was required to close completely or whether it was able to stay open, for example, to offer takeaway service but suffered because of the Government's stay-at-home advice.
With regard to Other policy wordings, these generally related to losses resulting from a business being prevented from using the premises because of restrictions and decisions made by a public authority as a result of the disease. The Court's decision was to reject the insurer's argument that there needed to be a local outbreak which will be helpful to businesses but in other areas, the Court construed the meaning of certain terms more narrowly.
Each case will still, therefore, have to be considered in the context of the precise wording of the policy and in the context of the business concerned.
The insurers who were the defendants to the test case can appeal the judgment and are considering their position.
If you have made a claim to your insurance company under a Business Interruption Policy and it has been rejected by your insurer you should renew that claim in the light of this judgment. If insurers have deferred dealing with your claim pending the outcome of the test case, you should now hear from your insurers to see whether they have changed their view.
In the event that there is still a dispute Myerson Solicitors will be able to assist in considering the policy wording in your case, how that should be interpreted in the light of the Court's judgment and giving advice about how to pursue your claim if insurers still refuse to pay out.