The Supreme Court has delivered its judgment in respect of the Financial Conduct Authority (“FCA”) business interruption insurance test case, with the court’s ruling in the favour of small firms.
The court’s decision brings to a close the legal arguments imposed by 14 types of policies issued by six insurers, and a substantial number of similar policies in the wider markets.
Reports suggest that this could potentially force insurers to pay out £1.2bn in CBI claims.
The FCA first brought the case against the courts, initially selecting a representative sample of 21 policy types issued by eight insurance groups.
Insurers are expected to move quickly to pay claims that the judgment says should be paid, making interim payments wherever possible.
Customers who have made claims that are affected by the test case will be contacted by their insurer to discuss what the judgment means for their claim.
It is stated that all valid claims will be settled as soon as possible and in many cases the process of settling claims has begun. Some payments have already been made where valid business interruption claims have not been impacted by the test case ruling.
This is obviously great and much needed news for those small businesses that have been affected by COVID and now have a valid claim for business interruption.
Insurance policies would have been amended for new and renewing customers since this issue emerged, so losses from the latest lockdown measures in different parts of the UK would be clearly stated as part of the cover – or not – in new business interruption insurance policies.
Should you need any assistance with the preparation of information to your insurance company, such as quantifying or reviewing the loss claim, please contact your local Barnes Roffe partner.
West London
3 Brook Business Centre,
Cowley Mill Road,
Uxbridge, UB8 2FX
East London
London, E11 1GA
South London
London Bridge
73–81 Southwark Bridge Road,
London, SE1 0NQ
City London
London, EC2M 1JH
We believe we are more than just your average accountancy firm. Our goal at Barnes Roffe is to engage our clients through a proactive relationship, which provides you with the resources and tools you need to enable you to take charge of your finances with confidence.
Tax news, audit news and any new accounting news ... with the help of our topical tips, blogs and key guides you can enjoy the benefit of being regularly informed of business and accounting updates which are likely to be relevant to you and your business.
PLEASE NOTE: By the very nature of this type of information the details of tax law might have changed since they were published, so contact your Barnes Roffe partner before acting on any matter contained in these documents.