FCA Business Interruption Test Case Judgment

Posted on January 27, 2021 · Posted in News

The Financial Conduct Authority (FCA), the UK’s financial regulator, brought court proceedings in July 2020 to test how certain business interruption insurance policies respond to claims arising from Covid-19.

In total eight insurers took part: Hiscox, Arch, Argenta, MS Amlin, RSA, QBE, Zurich and Ecclesiastical.
On 15th September 2020, the High Court offered its judgment finding in favour of the FCA on the majority of issues, particularly regarding coverage and triggers relating to most Disease and “Hybrid” clauses.

This judgment should bring some welcome clarity to Policy Holders who have been impacted by COVID 19 related Business Interruption Losses. However, it should be noted that the judgment did not say that the eight defendant insurers are liable across all of the 21 different types of policy wording in the representative sample presented to the Court and each policy wording will have to be considered against the detailed judgment.

So, what happens next…

Insurers and the FCA, are now reviewing this judgment. If any of the parties to the case determine that there are aspects of the judgment they wish to appeal, they will seek permission to do so from the court.

Should an appeal take place, the position on the cover available under a policy including any existing claims will remain unchanged by the judgment until that appeal process has concluded.

If you have intimated a claim for a Covid-19 related Business Interruption which has not yet settled and your wording was one which the Test Case was relevant to, you should have received a communication from your Insurer within 7 days of the judgment advising what the next steps will be.

We will continue to monitor developments and provide ongoing support to our clients. If you have any queries about how the judgment affects your policy, please contact your usual Keegan & Pennykid representative.


It was announced on the 2nd October 2020 that The FCA, Hiscox, Arch, Argenta, MS Amlin, RSA, and QBE had been granted permission to appeal the judgment in this case to The Supreme Court. No date has been set for the hearing which is expected to be before the end of the year. Ecclesiastical and Zurich did not join the group in appealing the decision as the original judgment ruled that their policies did not provide any cover for Business Interruption in relation to the Covid-19 outbreak.

More information on this case can be found on the FCA’s website: 

Supreme Court ruling 15/1/2021

In the immediate aftermath of the ruling, Insurers have been afforded a limited period of time to consider the impact the ruling may have on the cover afforded by their policies including any change to their approach to Business Interruption claims already submitted and/or future claims that may be submitted to them in light of the ruling.

At this time, we await communication from Insurers and our further update will be provided after those responses have been received.

In the meantime:

  • please click HERE to redirect to the FCA Website for their comments on the outcome.
  • you can also click HERE to redirect to the Supreme Court website which will allow you to review the individual judgments handed down.

As always, we remain open and are here to answer any queries you may have at this time.