FCA Test Case Information

COVID-19 

On 1 May 2020, the Financial Conduct Authority (FCA) announced its intention to seek clarity and certainty around non-damage business interruption cover in relation to the coronavirus/COVID-19 pandemic. 

The FCA initiated a Test Case on behalf of policyholders to determine the interpretation of certain clauses within policies that include non-damage business interruption cover. They hoped that this would assist in providing greater clarity to insurers and policyholders alike in the handling of COVID-19 claims. 

The Test Case was first considered in the High Court. The High Court Judgment was published on 15 September 2020. This was appealed to the Supreme Court. The Supreme Court Judgment was published on 15 January 2021. The Supreme Court published its Declarations on 14 July 2021. 

The Declarations distil the Supreme Court’s Judgment into a Final Order reflecting and summarising the Court’s conclusions. A copy of the Supreme Court’s Judgment and Declarations can be found on the FCA’s Business Interruption insurance website. 

Since the Test Case there have been further court rulings about the interpretation of other clauses contained within policies that include non-damage business interruption cover. In accordance with the FCA’s expectations whenever new court rulings are published, Probitas has considered and will continue to consider how and whether they have any impact on the interpretation of our policies and any claims under those policies. 

Where appropriate, including where we consider that the ruling has a wider beneficial impact for our policyholders, we will communicate with any policyholders whose claims are affected. 

If any policyholders have a query or believe they are affected or potentially affected by any further court rulings and have not been contacted by us then they are asked to contact our claims team – claims@probitas1492.com. 

Corbin & King Ltd and others v Axa Insurance UK Plc – February 2022 

In line with our approach detailed above, we have reviewed the clauses contained within policies that include non-damage business interruption cover in light of the High Court’s decision in Corbin & King v Axa in February 2022. On the basis that the Government or Local Authority Action extension clause within the Probitas Commercial Combined Policy is identical to RSA2 in the Test Case, we are satisfied that the ruling in Corbin & King v Axa does not impact on our interpretation. 

Useful websites 

For more information about the Test Case, the court rulings after the Test Case and updates from the FCA including the FCA’s Guidance on Proving the Presence of COVID-19 and the FCA’s calculator for this purpose, we recommend the FCA’s dedicated Business Interruption website: https://www.fca.org.uk/firms/business-interruption-insurance.

Register for the latest business interruption updates from the FCA: www.fca.org.uk/sign-business-interruption-bi-insurance-email-updates 

Information for small businesses from the Financial Ombudsman Service: https://sme.financial-ombudsman.org.uk 

Last updated: 3 August 2022 

COVID-19

On 1 May 2020, the Financial Conduct Authority (FCA) announced its intention to seek clarity and certainty around non-damage BI cover in relation to the coronavirus pandemic.

The FCA initiated a Test Case on behalf of policyholders to determine the interpretation of certain clauses within policies that include non-damage BI.  They hoped that this would assist in providing greater clarity to insurers and policyholders alike in the handling of COVID-19 claims.

The Test Case was first considered in the High Court. The High Court Judgment was published on 15 September 2020. This was appealed to the Supreme Court. The Supreme Court Judgment was published on 15 January 2021. The Supreme Court published its Declarations on 14 July 2021.

The Declarations distil the Supreme Court’s Judgment into a Final Order reflecting and summarising the Court’s conclusions. A copy of the Declarations can be found on the Supreme Court website and the FCA’s Business Interruption insurance website.

Useful websites

For more information about the Test Case, and regular updates from the FCA including the FCA’s Guidance on Proving the Presence of COVID-19 and the FCA’s calculator for this purpose, we recommend the FCA’s dedicated Business Interruption website: https://www.fca.org.uk/firms/business-interruption-insurance.

Register for the latest BI updates from the FCA: www.fca.org.uk/sign-business-interruption-bi-insurance-email-updates

Information for small businesses from the Financial Ombudsman Service: https://sme.financial-ombudsman.org.uk

Last updated: 21 July 2021