Hundreds of thousands of businesses are expected to be able to recover losses caused by the pandemic from their insurers, following the Supreme Court ruling.
The Financial Conduct Authority (FCA) says it will now work with insurers to make sure they ‘move quickly’ to pay claims to businesses, many of which are struggling to stay afloat.
The FCA brought the test case against eight insurers after 400 companies complained of unfair treatment. It argued that while some insurers had provided pay-outs to business customers, many claims had been rejected under ‘blanket denials of cover’.
In September 2020, the High Court found in favour of policyholders on most key issues but eight insurers then appealed the decision.
The Supreme Court has now dismissed these appeals, potentially paving the way for insurance pay-outs worth more than £1 billion.
According to the FCA, 370,000 policyholders holding 700 different types of policy issued by 60 insurers may now be in line for a pay-out.
While the Supreme Court’s judgment provides some clarity, it may not be plain sailing for everyone with some insurers still expected to argue over things like policy wording.
While the test case has resolved a number of key issues, it was not meant to cover all possible disputes.
That is why it is important for businesses to look at the type of policy they hold with an eye on both the High Court and Supreme Court judgments before pursuing their claims in relation to the business interruption resulted from Covid 19.
The first step is to check your business interruption insurance cover, identify any claims and urgently notify your insurer of any potential claim that you consider pursuing because some of the policies contain time sensitive provisions.
Following the Supreme Court ruling, you may wish to consider whether your claim should be revised. Our experienced business disputes solicitors can advise you on this.
If your claim is valid, and your insurer is still refusing to pay, we can assess your prospects of successfully challenging this decision.
The insurance companies involved in the test case were Arch Insurance (UK), Argenta Syndicate Management, Ecclesiastical Insurance Office, Hiscox Insurance, MS Amlin Underwriting, QBE UK, Royal & Sun Alliance Insurance and Zurich Insurance.
If you believe your business has a claim for losses with another insurer, we can advise you on what to do next.
Here’s what we have written previously on this subject:
For further advice on business interruption insurance claims and related issues, please contact Commercial Disputes Partner, James Taylor, at james.taylor@wards.uk.com or Solicitor, Richard Darbinian, at richard.darbinian@wards.uk.com.
Or click here to view Wards’ Business Disputes team.