FCA names eight insurers in BI test case

The UK’s Financial Conduct Authority has named eight insurers in the Particulars of Claim it submitted to the High Court as part of a test case that will define the future of business interruption payouts following the Covid-19 outbreak.

The regulator says that the insurers should be liable for paying out for business interruption claims related to the coronavirus crisis and the subsequent government lockdown restrictions placed on UK businesses as it takes the stance of ”adopting the policyholders’ position for the purposes of testing these points” in order to bring clarity to the market.

“The FCA has made clear its position that most SME insurance policies are focused on property damage (and only have basic cover for business interruption losses 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 COVID-19 pandemic,” it said.

“This case is focused on the remainder of policies that are, in the FCA’s view, suitable for consideration within the constraints of the test case procedure and in terms of the most effective use of court time.”

The FCA also made reference to the “businesses and groups of businesses” that are challenging the rejection of their claims, including the £52m payment sought by the Hiscox Action Group on behalf of its 397 group members.