Covid 19 - What you need to know - Supreme Court Orders Insurance payouts

We have previously reported on the Financial Conduct Authority’s (FCA) Court action to resolve contractual uncertainty in business interruption (BI) insurance cover.

Following representations to the Supreme Court in November 2020, the Supreme Court have today handed down judgement which is broadly in favour of the policy holders and will compel Insurance Companies to make payments under the terms of their policies held by a number of businesses including those in the hospitality sector. This action by the FCA was

it is reported that the insurers liability maybe as large as £1.2bn.

Richard Leedham, Partner at Mishcon de Reya who represents the Hiscox Action Group said:

"We are glad that the Supreme Court has found that the vast majority of policyholders of non-property damage Business Interruption (BI) cover will have cover for their business interruption losses caused by the national response of Government to COVID-19. This includes most of the members of the Hiscox Action Group, whom we represented in the case, and RSA and now all QBE policyholders whom we represented at first instance through my partner Sonia Campbell and Hospitality Insurance Group Action. The Supreme Court has recognised that, just when this cover was needed most by thousands of UK businesses, insurers were wrong to argue that coverage was applicable only if there were narrow local restrictions, that they could deny claims because the cover had not been intended to be provided and/ or because the interruption and therefore losses would have happened in any event.

The judgment should be a massive boost to all businesses reeling from a third lockdown who can now demand their claims are paid.”