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31 March 2021 / Celso De Azevedo
Issue: 7927 / Categories: Features , Commercial , Covid-19 , Insurance / reinsurance
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COVID claims: business as (un)usual

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What now for COVID-19 business interruption claims? Celso De Azevedo discusses the Supreme Court’s judgment & the issues likely to drive future litigation
  • Disputed issues in the draft Declarations Order.
  • Undecided issues and FCA guidance.

On 15 January 2021, the Supreme Court handed down its judgment on the Financial Conduct Authority (FCA) Test Case (The Financial Conduct Authority & Ors v Arch Insurance UK Ltd & Ors [2021] UKSC 1, [2021] All ER (D) 40 (Jan)) dealing with non-damage clauses which extended the typical coverage under business interruption insurance. According to the FCA, the Test Case will affect approximately 370,000 policyholders. In February, the Association of British Insurers estimated at £2bn the value of business interruption claims incurred in 2020 due to COVID-19.

The case included 21 representative policy ‘types’ issued by the eight insurers which became the defendants in the proceedings before the High Court. There were three types of policy wordings covering losses which were caused by:

  • an outbreak of disease within a specified radius (eg, 25 miles or one mile) of the insured
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