FCA Business Interruption Test Case

FCA Test Case update

Monday, 18 January 2021 Update

On 15 January 2021, the Supreme Court’s judgment brought welcome clarity to some very complex issues relating to COVID-19 business interruption claims and the underlying insurance policies, having heard appeals brought by the Financial Conduct Authority (FCA) and various insurers.

The Court found substantially in favour of the FCA on those matters which were the subject of the appeal, and the judgment represents the final step in the legal process.

Consequently, we are in the process of swiftly reviewing the judgment in detail, to determine the specific impact on each and every claim and will be contacting all customers affected by the outcome as soon as possible.

We recognise that it continues to be a very challenging time for many UK businesses, and welcome this final resolution which will enable Pen Underwriting to reach agreement on all valid claims as soon as possible, a process that is already underway in some cases.

If you have made a business interruption claim related to COVID-19 and have not yet returned the questionnaire that we sent out to you previously please complete and return this so that we can start the process of assessing your claim.

We have prepared some frequently asked questions to explain what happens next:

Does the judgment mean my claim will be paid?

The Supreme Court judgment provides the final legal position on those specific issues which were taken to appeal by the FCA and the insurers involved in the legal process. If the wording of your policy was similar to those considered by the Supreme Court such that the same principles and interpretation can be applied, and cover is confirmed under your policy, then all valid claims for COVID-19 related business interruption losses will be considered subject to policy terms and conditions.

Is the judgment final?

Yes. The Supreme Court judgment brings to an end the legal process relating to 14 types of business interruption policy wording issued by six insurers and a substantial number of similar policies in the wider market.

When will I be notified of a decision?

We are currently in the process of considering the implications of the Supreme Court decision and reviewing all of our affected claims. We will be communicating with those customers as quickly as possible.

What are the next steps?

You do not need to take any further action at this stage and we will contact all customers affected by the Supreme Court judgment to confirm the next steps in progressing their claims. However, please do complete and return the questionnaire sent to you previously if you have not already done so, which will enable us to start the process of assessing your claim.