An update on the FCA’s intervention in disputes over business interruption insurance coverage

Tue 2nd Jun 2020

The FCA’s proposed court action for a declaration on the meaning of certain policy wordings to achieve clarity and certainty for SMEs and others involved in pandemic related business interruption insurance disputes is progressing.

On 1 June 2020 the authority confirmed that a representative sample of 17 policy wordings used by 16 insurers (eight of whom will participate in the case) which “capture the majority of the key issues that could be in dispute” will be examined in the test case. The eight participating insurers are Arch, Argenta Syndicate Management, Ecclesiastical, Hiscox, MS Amlin, QBE, Royal & Sun Alliance and Zurich.

The authority expects the case’s outcome to provide guidance for non-participating insurers and policy holders on the interpretation of polices not covered by the current sample. It intends to publish a “comprehensive list of other insurers and many other BI policies in the market that [it] expects the case to affect” in early July.

  • The current list of sample policy wordings can be found on the FCA website here.
  • The preliminary list of affected insurers and the policies they have issued can be accessed here.

The FCA has invited comments from insurers, policyholders and other stakeholders on its proposed assumed facts, issues matrix and questions for the court to determine by 3.00 pm on 5 June 2020. Those documents together with the FCA’s consultation on draft guidance that sets out its expectations of regulated firms that are handling business interruption claims and related complaints during the pandemic can be found here.

The FCA is currently expecting the court to list its case over five to ten during the second half of July and we will provide further updates as more information becomes available. Insurers and policyholders will both be hoping that judgment is handed down as soon as is possible after that.

Please contact Simon Walsh or Tracy Lacey-Smith if you would like any further information or have any questions about your own insurance position.


If you would like more information or advice relating to this article or a Commercial Litigation & Dispute Resolution law matter, please do not hesitate to contact Simon Walsh on 01727 798085.

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