The FCA announced last month that it intends to seek legal clarity on business interruption insurance to assist businesses which are facing uncertainty about their claims. It aims to seek a court declaration on an “agreed and urgent basis” to get an independent view on disputed BI insurance policies. 

The purpose of this initiative is to determine whether the non-property damage BI cover provided by several insurers should respond to Covid-19, and whether it is legally possible to make a causal link between Covid-19 and the losses suffered by customers forced to close their businesses.

The regulator revealed the eight insurers taking part in the High Court case, as well as the 17 policy wordings that capture the majority of the key issues that could be in dispute.


The FCA selected a representative sample of 17 policy wordings which will be tested and insurers that use those wordings, to give as much clarity as possible to both insurers and policyholders alike. The FCA approached 56 insurers and reviewed over 500 relevant policy wordings to come up with this sample. The regulator said that the test case would also provide guidance for other BI policies not included in the sample, meaning that other insurers would be impacted regardless of their inclusion.

The FCA expects to publish a list of all the relevant insurers and policies that may have impacted wordings in early July. 

Christopher Woolard, Interim Chief Executive at the FCA said:

‘The court action we are taking is aimed at providing clarity and certainty for everyone involved in these BI disputes, policyholder and insurer alike. We feel it is also the quickest route to this clarity and by covering multiple policies and insurers, it will also be of most use across the market. The identification of a representative sample of policies and the agreement of insurers who underwrite them to participate in these proceedings is a major step forward in progressing the matter to court.’

The FCA also proposes questions for determination by the court, focussing on what constitutes damage, cause of the denial of access to offices, proximity to premises, etc.

The FCA also issued  consultation on draft guidance to set out its expectations of all firms handling BI claims and any related complaints between now and the court decision, including an expectation that they identify those policies where their decision to deny claims may be affected by the test case. These expectations also apply tointermediaries that handle claims on behalf of insurers.

Next steps: 

19 June FCA files claim form and particulars
11 June Case management conference, at which the court will be invited to fix the timetable for the case
23 June Insurers file Defences
26 June Further case management conference
3 July  FCA files Reply
First half July Skeleton arguments and replies served
Second half July 5 to 10 day court hearing




The FCA states that when any insurer settles a claim for a policy that is part of the representative sample of policies referred to in the test case, the insurer must inform all other parties in writing as soon as possible. However, a settlement will not automatically mean that part of the test case has ceased. 


Insurers or the FCA will be able to appeal the decision of the court, subject to the usual procedural rules. 

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