Ruling on a test case presented by the Financial Conduct Authority (FCA), the High Court has ruled that business interruption policies with pandemic or notifiable disease clauses should be read as to cover COVID-19, and that claims should be met “in most cases.”

The test case has clarified that the COVID-19 pandemic and the government and public response are considered a single cause of the covered loss, which is a key requirement for claims to be paid. The ruling also notes that each policy needs to be considered against the detailed judgment to work out what it means for that policy.

370,000 policyholders have been identified as holding policies that may be affected by the outcome of the test case. Policyholders with affected claims can expect to hear from their insurer within the next seven days. Read the FCA’s statement on the outcome of the test case.

Correct as of 16 September 2020