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FCA Test Case - Findings Published

18 September 2020

Earlier this week, (15th September) the FCA published the outcome of the recent court case on COVID-19 Business Interruption insurance. The judgment is a complex document which runs to over 150 pages and we have engaged legal experts to review this and provide further detailed guidance.

While the judgement found in favour of the FCA’s case on a majority of key issues raised, it does not, however, declare the eight defendant insurers liable and each policy will need to be considered against the detailed judgement to establish what it means for the policy and the claims intimated.

The FCA legal team at Herbert Smith Freehills have commented with the following:

“While different conclusions were reached in respect of each wording, the Court found in favour of the FCA on the majority of the key issues, in particular in respect of coverage triggers under most disease and ‘hybrid’ clauses, certain denial of access/public authority clauses, as well as causation and ‘trends’ clauses.”

This is potentially good news for a number of our clients that have been heavily impacted by COVID-19 and we are communicating with those who have intimated relating business interruption claims to us.


What Are the Next Steps?


Once we fully understand the implications of the judgment, we will communicate further on the implications to our clients and provide more information.

Insurers are now required to issue an update to all policyholders with affected claims within the 7 days following the ruling. We would be much obliged if you could share a copy of this communication with us for our file. In the event the communication is issued to us directly from the insurer then we shall forward this on to you immediately.

There is a possibility that one or more insurers will appeal all or part of the judgement. Indeed, some insurers have already asked for time to apply for an appeal. However, any appeal does not stop any of our clients seeking to settle their claims with their insurer (i.e. before the outcome of any appeal is known).

We will continue to monitor the situation as it develops and give guidance in relation to how we can progress matters and continue to support our clients. In the meantime, please do not hesitate to contact your usual Bruce Stevenson representative should you wish to discuss any aspect of this judgement.

If you think you have been affected and have not contacted us yet, please get in touch with your usual Bruce Stevenson contact as soon as possible.


Further Information


FCA's legal team response to the judgement

FCA Statement of Full Judgement

FCA dedicated pages for BI news

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