Supreme Court Rules on Covid-19 Business Interruption Insurance

Published / Last Updated on 18/01/2021

The Supreme Court allowed the Financial Conduct Authority (FCA) a 'class action' to appeal against a High Court ruling on behalf of business interruption insurance providers on business insurance policyholder financial loss claims during the pandemic. 

The FCA had brought the test case to the Suprem Court to clarify uncertainty as to whether business interruption insurance covers coronavirus pandemic business financial losses or are they as a result of things like an 'Act of God' or Government intervention and not covered.

The Supreme Court’s 112-page ruling considered complex insurance policy wording types and ruled that many business interruption insurance claims should be paid for coronavirus-related financial losses.

The FCA’s Executive Director of Consumers and Competition, Sheldon Mills said: “Substantial losses and distress to business is being caused due to coronavirus and many businesses are under financial strain to continue working”.  He continued: “We are working closely with insurers as the test cases involve complex legal issues.  We want to get clarity for a wide range of parties and ensure claims are paid or interim payments made as quickly as possible to companies that have claims that are affected by the judgment”.

“We are grateful that the Supreme Court has delivered the judgment quickly”.

In September 2020, the High Court ruled that most of the disease and certain prevention of access clauses which included 12 policy types from a sample of 21 issued by 6 insurers did provide appropriate cover, however the 6 insurers appealed those conclusions for 11 of the policy types hence the Supreme Court Appeal.

The Supreme Court dismissed insurers appeals for different reasons including appeals against the High Court’s ruling that cover should apply for part closure of premises as well as full closure and mandatory closure orders that were not legally binding.


This judgment will bring an end to legal arguments for 14 types of policies issued by 6 insurers and a substantial number of similar policies with other insurers which will also now lead to more successful claims.

The test cases have also removed the need for policyholders to resolve disputed claims directly with insurers - the Supreme Court has spoken and your policy wording will either cover business interruption financial losses and claims or they will not according to law and not intepretation.

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