Business interruption insurance – what will the FCA’s test case mean for your business?
A test case involving 500 policies from 40 insurers and 17 policy wordings will be scrutinised with the case keenly watched by businesses that have had claims rejected.
Lucy Nash, an Associate in the Dispute Resolution team at RWK Goodman explains what this test case will mean for businesses claiming in relation to interruption caused by the coronavirus pandemic, including those businesses with policies included in this test case which have already had their claims rejected.
“If you have had a business interruption claim rejected from your insurer, check the list to see whether your policy has been chosen to form part of the representative sample to be examined in the FCA’s test case. The list can be found via the following link.
“If it has, then those insurers have entered into a framework agreement with the FCA to govern the process and the timetable for the test case, but in short, it is envisaged that the court hearing will be held during the second half of July, so you could have some clarity relatively soon.
“If your insurer has not been selected to form part of the representative sample to be examined in the FCA’s test case then you should seek advice as to whether the relevant wording in your policy is the same or similar to those policies that have been selected as, depending on the outcome of the test case, this could give you the leverage you will need to either negotiate a settlement or issue proceedings.
“Even if your policy wording does not appear to be the same or similar to those policies being tested then it would still be worth seeking advice on whether there may be scope to argue that the policy provides cover for business interruption in these circumstances. Don’t just assume that because the media coverage of these disputes has to date been largely negative, that you should just accept an insurer’s refusal to pay out.”