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Supreme Court Judgement in FCA’s business interruption insurance test case

The Supreme Court delivered its Judgement on the 15th January 2021, and has predominantly allowed the FCA’s appeal in favour of policyholders whose policy wordings formed the subject of the Test Case.

Whilst some clarity has now been provided by the Judgement, it is extremely important to stress that this should not be seen as an overall instruction for Insurers to pay all business interruption claims arising from the pandemic. The Test Case only affected a minority of Policy Wordings in the market. Each claim should be reviewed thoroughly on a case by case basis, due to the diverse nature of insurance contracts.

Also, please note that whilst your Insurer may be one of those listed as being involved in the judicial review, this does not mean that your particular policy is included.  Each Insurer has many product offerings in the market. The Judgement will not overrule any wording with specific exclusions for losses relative to disease, or alter the position where disease cover is on a specified list basis or where it is confirmed that cover is available only in the event of occurrence or manifestation at the premises.

Given the very complex nature of the Judgement at over 100 pages, we are seeking further guidance in order to ensure we can provide the best support to those of our clients affected.  Once we have concluded our own review of the Judgement in line with independent and FCA guidance, we will then be contacting all of our clients that have policies affected by the Judgement, so that we can assist them further.  This may take some time to work through and therefore we appreciate your patience in the meantime.

More information can be found on the FCA website here

If you have any questions regarding this, please get in touch with your usual MacDonald Group contact.

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