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Business Interruption FCA Test Case Judgement

Following the handing down of the judgment of the FCA Test Case on 15th September, the Court found in favour of the arguments advanced by the FCA on the majority of the key issues. At the same time, however, the case determined that a number of insurers would not be liable to pay claims.

The judgment did not say that insurers are liable across all of the 21 different types of policy wording considered by the court in the test sample. Each policy needs to be considered against the detailed judgment to work out what it means for that policy.

The judgment is complex, runs to over 150 pages and must be considered carefully to assess its impact on both the policy wordings directly referred to in the judgment and those which may be similar in nature. Whether your policy responds will also be fact-specific to your circumstances and will depend on what actually happened to your particular business.

The advice is that policyholders with affected claims can expect to hear from their insurer shortly. We therefore suggest waiting to hear from your insurer to understand their interpretation of your policy wording in light of the judgment.

Whether or not your policy will respond in principle will depend on the type of clause in your policy. There will be customers, unfortunately, whose insurers will maintain their denial of liability cover.

Next steps

The FCA and Defendant insurers are considering the judgment and what it might mean in respect of any appeal. Any applications to appeal will be heard at a consequentials hearing before the High Court. The FCA is seeking to have a consequentials hearing as early as possible.

The FCA and Defendant insurers have agreed that they will seek to have any appeal heard on an expedited basis, given the importance of the matter for so many policyholders. This includes exploring the possibility of any appeal being a ‘leapfrog’ appeal to the Supreme Court (rather than needing to be heard by the Court of Appeal first).

Depending on the outcome of any appeals Insurers make, and should the current judgement be upheld following any such appeals, Oncover Insurance are here to help. We have an arrangement with a trusted firm of Loss Assessors whereby they will review and consider taking up your case to get the best possible outcome for you (even if we did not arrange your policy).

If you would like us to look further into this option for you, please email us a copy of your policy schedule and policy wording so that we can first establish if you are affected by the judgement of the FCA Test Case.

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Oncover Insurance Services Limited is authorised and regulated by the Financial Conduct Authority (FCA).  Our FCA Register number is 306045. The FCA's register can be accessed through www.fca.org.uk/register. We are covered by the Financial Ombudsman Service (FOS).  See their website https://www.financial-ombudsman.org.uk/ for further information. Registered in England & Wales under Company no. 04036567. Registered address: 89c College Place London NW1 0DR.