The UK Supreme Court has upheld the judgement on the Financial Conduct Authority’s (FCA) business interruption (BI) insurance test case.


After the UK High Court passed its long-awaited judgement on the FCA’s BI insurance test case in September 2020, ruling in favour of policyholders on the majority of key issues, the UK Supreme Court granted permission for the FCA and a group of insurance and reinsurance companies to appeal its ruling.

Via a live video link this morning, a UK Supreme Court representative announced at the outset the decision of the appeals of both the FCA and the Hiscox Action Group.

He explained that, “the appeals of the Financial Conduct Authority and the Hiscox Action Group are substantially allowed, and the insurers appeals are dismissed.”

The result of the appeal of the landmark business interruption case will be welcomed news for small businesses in the UK.

For insurers and reinsurers Arch, Argenta, Hiscox, MS Amlin, RSA, and QBE, their appeals have been dismissed. This means that the coverage will have to be honoured and in certain instances, where insurers had previously denied cover.

As we’ve discussed previously, this will have consequences for the reinsurance market, as some of the carriers expect any additional BI claims to be at least partially covered by their reinsurance protection.

It’s believed that some 370,000 small businesses may have been affected by the outcome of the case, with analysts estimating that between £3.7 billion and £7.4 billion of claims are on the line.

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