Covid 19 - What you need to know - Insurance case moves to Supreme Court

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

On 15th September the FCA published news confirming the Courts had found in the favour of the arguments advanced by policyholders by the FAC on the majority of key issues.

That decision has been Appealed and is now being argued before the Supreme Court.

Broadly speaking, the Supreme Court is asked to determine:

1. certain matters of construction relating to:
• "Disease Clauses" (i.e. those which can be triggered by the occurrence of severe acute respiratory syndrome coronavirus 2 ("COVID-19"), typically within a specified distance of the insured’s premises);
• "Prevention of Access Clauses" (i.e. those triggered by public authority intervention preventing access to, or use of, premises as a result of COVID-19); and
• "Hybrid Clauses" (i.e. those clauses which contain wording from both Disease and Prevention of Access Clauses), and
2. whether the Divisional Court was correct:
• to apply certain counterfactual scenarios in relation to the operation of the clauses in relevant policies which provided for loss adjustments (the "Trends Clauses"); and
• in its analysis of Orient-Express Hotels Ltd v Assicurazioni Generali S.p.A.

The hearing started on Monday and is expected to conclude on 19th November. The Judgement of the Court will follow sometime after the conclusion of the case, this can take several weeks/months depending on the complexity of the issues in dispute.

We shall keep you updated.