Business interruption insurance – test case update – judgment expected in December or January

This is a very brief overview of very recent developments and is most definitely not an analysis of the arguments raised earlier this month before the Supreme Court, other than by way of a reminder that:

  1. the competing arguments of the parties – the FCA and the interested insurers – focus on the question of whether or not the range of representative business interruption (BI) wordings provide indemnity for operating losses sustained by policyholders during the first ‘lockdown’ of 2020, and
  2. the decision at first instance examined this by grouping the relevant clauses into three broad types – disease clauses, prevention of access clauses and hybrid clauses – interpreting each in its context, dealing with causation, prevalence of Covid-19, counterfactuals and with the effect on claims adjustment of so-called ‘trends’ clauses.
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FCA to seek judicial decision on BI coverage and COVID19

There’s an often quoted piece of advice about never asking a question in court to which you don’t know the answer. The rationale given for this is to avoid the answer being not only a very unwelcome surprise but also something which fundamentally damages your arguments. That being the case, how to ask the question whether commercial insurance policies cover business interruption (BI) losses caused by restrictions due to COVID-19?

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