- Supreme Court gives landmark judgment in coronavirus (COVID-19) business interruption test case (Financial Conduct Authority v Arch Insurance)
- What are the practical implications for insurance practitioners with regard to insurers and policyholders?
- Coronavirus business interruption claims
- The law of causation
- Wide area damage business interruption claims
- The interpretation of business interruption extensions
- What was the background?
- What did the court decide?
- Disease clauses—construction
- Prevention of access and hybrid clauses—construction
- Trends clauses (pre-trigger losses) Orient-Express v Generali
- Case details
Insurance & Reinsurance analysis: The Supreme Court has given judgment in the coronavirus (COVID-19) business interruption test case concerned with the recoverability of losses suffered by businesses during the coronavirus pandemic under various non-damage business interruption insurance extensions. The Supreme Court unanimously dismissed the insurers’ appeals and allowed the Financial Conduct Authority’s (FCA) appeals, albeit on qualified terms. The effect of the decision on each individual policyholder’s claim will depend on the specific terms of the policy and the facts of each claim. In broad terms, however, most of the insuring clauses included within the test case have been held to provide cover for coronavirus business interruption losses. This is also a landmark judgment on the law of causation—and is thus a must-read for all commercial practitioners. In the insurance context, the Supreme Court has overruled Orient-Express Hotels v Assicurazioni Generali—the only decision in this jurisdiction on business interruption recovery in cases of wide area damage. Written by Sushma Ananda, barrister at 7 King’s Bench Walk.
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