Business Interruption Insurance – Court finds in favour of business owners

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On 15 January the Supreme Court gave its judgment in a test case brought by the Financial Conduct Authority seeking clarity on the meaning and effect of common types of “non-damage” business interruption insurance policy provisions for businesses adversely affected by the Covid-19 pandemic.

For the most part, the Supreme Court found in favour of the Financial Conduct Authority. The practical effect of the judgment is that the insurance provisions that were at issue will – in principle – provide cover for business interruption caused by COVID-19.

The judgment means that more policyholders will have valid claims and some pay-outs will be higher. The Financial Conduct Authority has said it will be working with insurers to ensure they quickly pay claims that the judgment says should be paid, making interim payments where possible.

A small piece of good news for hard hit business owners in these troubled times.

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