Supreme Court backs small firms on FCA Business Interruption Insurance test case
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Date Published:15 Jan 2021 Last Updated:24 Oct 2021

Supreme Court backs small firms on FCA Business Interruption Insurance test case

Banking & Finance Litigation

In a Judgment handed down this morning, the Supreme Court dismissed insurers’ appeals in the Financial Conduct Authority’s (FCA) business interruption test case. The ruling will provide guidance for a further 700 policies which is likely to affect approximately 370,000 small business policy holders.

The appeals of insurers Arch, Argenta, Hiscox, MS Amlin, RSA and QBE as well as the regulator were fast-tracked to the Supreme Court, bypassing the Court of Appeal, and were heard over four days in November 2020.

The ruling covered complex issues such as disease clauses, whether businesses were denied access to the properties and loss of earnings.

In addition to the insurers included within the test case, as many as 60 other insurers sold similar products and, as a result of the Supreme Court Judgment, may now pay out on many, but not all, of their policies.

Following today’s decision, the insurance industry is expected to pay out over £1.8 billion in Covid-19 claims relating to the first lockdown in March 2020, which includes business interruption policies. For some businesses the ruling could provide the vital funds needed to ensure that they can continue to trade.

The FCA, which brought the test case, said: “We will be working with insurers to ensure that they now move quickly to pay claims that the judgment says should be paid, making interim payments wherever possible.” Further information from the FCA on the Judgment can be found here.

Many insurance policies will have been amended for new and renewing customers since this issue emerged, therefore, losses from the latest lockdown measures in different parts of the UK should be clearly stated as part of the cover (or not) in new business interruption insurance policies.

How can Ellis Jones help?

Ellis Jones’ Banking & Finance Litigation solicitors have specialist knowledge and expertise across a broad range of areas acting for commercial clients in disputes with financial institutions. If you feel you may have a valid business interruption insurance policy covering Covid-19, and are unhappy with a decision from the insurer on your claim, please contact Kirsty Handyside or William Fox Bregman of our Banking and Finance Litigation Department on 01202 057738 or via an email at or