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Business Interruption Insurance – Worth the Paper it’s Written On?

A significant number of businesses have faced closure and/or extensive disruption due to the Covid-19 pandemic.  Unsurprisingly, many have made claims under their business interruption (BI) insurance policies for financial loss suffered during the lockdowns which have been imposed by government to tackle the pandemic. Many BI policies contain similar or identical wording and the outcome of these claims created widespread uncertainty as some insurers accepted liability while others did not.

Last year, the Financial Conduct Authority (FCA) brought a test case to seek clarification on the correct interpretation of many common BI policies. The Court considered 21 different policy wordings from 8 different insurers.

The original judgement was handed down on 15 September 2020 although both the FCA and insurers made appeals to the Supreme Court. On the 15 January 2021, the Supreme Court handed down its judgement (Appeal).

The Appeal was decided mostly in favour of the FCA which means that many businesses who hold BI policies will now have cover for losses suffered by reason of enforced closure or loss of business during the Covid-19 pandemic. However, the test case did not consider all policies so it is important that the exact policy wording is examined to determine whether cover should be granted.

If you are facing difficulties pursuing a claim against your insurers or have any other queries in relation to the Appeal and your BI policy, we can advise. Please contact us by telephone or email at Please include “BUSINESS INTERRUPTION” in the header of your emails so that they can be directed to our specialist advisors.

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