Business insurance judgement looms

  • 17 Nov 2020

The dispute about Covid-affected small business insurance payouts has reached the Supreme Court this week, with a final judgement expected after the hearing.

Business interruption claims have been disputed by many insurers, who argued that policies were never meant to cover such unprecedented situations.

The City watchdog, the Financial Conduct Authority, brought a test case with eight insurers agreeing to take part in proceedings.


The High Court found that most, but not all, of the policies involved should pay out - offering a potential lifeline to many of these small businesses.

Following an appeal, the case is now at the Supreme Court.

The final ruling by the Supreme Court judges will provide authoritative guidance for the other policies, and possibly of other ones not part of the case.

For example, the Financial Ombudsman Service and courts in Scotland and Northern Ireland are expected to use the judgment to rule on other, similar cases.

Many businesses will have renewed annual policies since the first lockdown began and these will have Covid exclusions, so claims are mostly relevant for older policies during the first UK lockdown.

Mike Cherry, the chairman of the Federation of Small Businesses, said: “We hope to see progress this week, with a fair Supreme Court ruling to follow and swift payments to those with policies which clearly cover crisis situations like this one.”

The Supreme Court will give judgement some weeks after this week's hearing.

The FCA have said they will expect insurers to respond quickly to the final judgement, if the result means they are required to do so.


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