Supreme Court verdict on Business Interruption Insurance test case may result in claims of over £1.8bn for 370,000 businesses.
Following the business interruption test case in September 2020 appeals were brought by the FCA, Hiscox Action Group and others against insurers who said there was no claim on policies for “business interruption” as a result of the pandemic.
Insurance firms will now be forced to pay out on policies for money lost because of Covid-19 restrictions following this landmark court case.
Announcing the Supreme Court’s ruling Lord Hamblen said: “The appeals of the Financial Conduct Authority and the Hiscox Action Group are substantially allowed and the insurers’ appeals are dismissed.”
Huw Evans, Director General of Association of Business Insurers said:
“Insurers have supported this fast-track legal process every step of the way and we welcome the clarity that the judgment will bring to a number of complex issues.
Today’s judgment represents the final step in the appeal process.
The insurance industry expects to pay out over £1.8bn in Covid-19 related claims across a range of products, including business interruption policies.
Customers who have made claims that are affected by the test case will be contacted by their insurer to discuss what the judgment means for their claim.
All valid claims will be settled as soon as possible and in many cases the process of settling claims has begun.”