Supreme Court rules on business interruption insurance cases
Business owners affected by Covid-19 will be pleased to see that the Supreme Court has backed their claims.
As we reported back in November, the final ruling on the appeal of the Financial Conduct Authority (FCA)’s business interruption case was heard on 16 November in the Supreme Court.
The ruling was handed down by the Supreme Court today (15 January 2021) and substantially allowed the FCA’s and the Hiscox Action Group (HAG)’s appeal and dismissed insurers’ appeals.
The court addressed the issues arising on the appeals of the FCA with respect to these areas:
1. The interpretation of “disease clauses”
2. The interpretation of “prevention of access” clauses
3. The question of what causal link must be shown between business interruption losses and the occurrence of a notifiable disease
4. The effect of “trends clauses”
5. The significance in quantifying business interruption losses of effects of the pandemic on the business which occurred before the cover was triggered
In relation to causation and the interpretation of trends clauses, the status of the decision of the Commercial Court in Orient-Express Hotels Ltd v Assicurazioni Generali SpA (trading as Generali Global Risk)
The court found that the vast majority of policyholders of non-property damage BI cover will have cover for their business interruption losses caused by the national response of Government to COVID-19
“The judgment should be a massive boost to all businesses reeling from a third lockdown who can now demand their claims are paid,” said Richard Leedham, a partner at law firm Mishcon de Reya who represents the Hiscox Action Group.
“The hope and expectation of our clients is that the claim adjustment process starts immediately and that insurers will not continue to cause further distress by further unnecessary delay.”
Responding to the judgment, the FCA said many thousands of policyholders will now have their claims for coronavirus-related business interruption losses paid.
Sheldon Mills, executive director, consumers and competition at the FCA, said: ‘Our aim throughout this test case has been to get clarity for as wide a range of parties as possible, as quickly as possible, and today’s judgment decisively removes many of the roadblocks to claims by policyholders.
Posted on 01/15/2021 by Ortolan
