Covid 19 - What you need to know - FCA provide update on business interruption claims

03 Jun

We have previously reported on the FCA’s proposed Court action to clarify issues surrounding business interruption claims.

As readers will be aware many businesses’ claims arising from closures associated with the pandemic have been refused by their insurers.

The FCA have now issued an update on their action.

Christopher Woolard, Interim Chief Executive at the FCA said:

The court action we are taking is aimed at providing clarity and certainty for everyone involved in these BI disputes, policyholder and insurer alike. We feel it is also the quickest route to this clarity and by covering multiple policies and insurers, it will also be of most use across the market. The identification of a representative sample of policies and the agreement of insurers who underwrite them to participate in these proceedings is a major step forward in progressing the matter to court.’

The FCA’s view remains that most SME insurance policies are focused on property damage (and only have basic cover for BI as a consequence of property damage) so, at least in the majority of cases, insurers are not obliged to pay out in relation to the coronavirus pandemic. This case is focused on the remainder of policies that could be argued to include cover.

On 1st May 2020, the FCA also asked 56 relevant insurance companies to provide to the FCA with information on their BI policies with more than 500 policyholders, and how they intended to handle claims on these policies by 15th May 2020. A number of the relevant insurers decided to accept claims from policyholders with certain policies which included particular wordings which had previously been in dispute.

The following 16 insurers use at least one of the policy wordings in the FCA’s representative sample which will be examined in the test case:

  • Allianz Insurance plc (part of Allianz SE)
  • American International Group UK Limited (part of American International Group, Inc.)
  • Arch Insurance (UK) Limited (part of Arch Capital Group Limited)
  • Argenta Syndicate Management Limited (part of Hannover Re)
  • Aspen Insurance UK Limited (part of Aspen Insurance Holdings Limited)
  • Aviva Insurance Limited (part of Aviva plc)
  • Axa Insurance UK plc (part of AXA SA)
  • Chubb European Group SE (part of Chubb Limited)
  • Ecclesiastical Insurance Office plc
  • Hiscox Insurance Company Limited (part of Hiscox Limited)
  • Liberty Mutual Insurance Europe SE (part of Liberty Mutual Group)
  • MS Amlin Underwriting Limited (part of MS&AD Insurance Group Holdings, Inc.)
  • Protector Insurance UK (part of Protector Forsikring ASA)
  • QBE UK Ltd (part of QBE Insurance Group Limited)
  • Royal & Sun Alliance Insurance plc (part of RSA Insurance Group plc)
  • Zurich Insurance plc (part of Zurich Insurance Group Limited)

Next steps

The FCA has published a time line for the next principal next steps in the litigation. There remain a number of uncertainties to the timeline including the consent of the court, which impact upon the same:


9th June

FCA files claim form and particulars

c.11th June

Case management conference, at which the court will be invited to fix the timetable for the case

23rd June

Insurers file Defences

c.26th June

Further case management conference

3rd July

FCA files Reply

first half of July

Skeleton arguments and replies served

second half of July

5-10 day court hearing

We shall keep you updated.


Law correct at the date of publication.
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