Business interruption insurers file defences in test case

The insurers involved in the Financial Conduct Authority’s (FCA) business interruption test case have filed their defences.

Each defence was filed in response to the FCA’s claim on behalf of business interruption policyholders that were hit by coronavirus (Covid-19) pandemic and subsequent lockdown.

In its claim, the FCA raised the government’s order for businesses to close, a lack of express or implied exclusion for pandemics in policy wordings, and that cover triggers had to be within a certain distance or vicinity of insured premises.

The FCA filed the test case against Hiscox, Arch Insurance UK, Argenta Syndicate Management, Ecclesiastical Insurance, MS Amlin Underwriting, QBE UK, RSA and Zurich, after identifying their business interruption policy wordings as capturing the majority of the key issues that could be at dispute in the legal proceedings brought in response to rejections of Covid-19 claims.

Policyholders, their insurance intermediaries, other stakeholders and their legal advisers can provide comments to the FCA on the defences, ahead of its official response due on 3 July. 

A deadline of 3pm on 29 June has been set for comments.

With the timetable for the test case set, eight days of court hearings will take place between 20 and 23 July and 27 and 30 July.

Mark Dugdale