The Supreme Court has handed down judgment in the Covid-19 Business Interruption insurance test case of The Financial Conduct Authority v Arch and Others. It unanimously dismissed the appeals by the insurers and allowed all four of the appeals by the Financial Conduct Authority (FCA), in two cases on a qualified basis.
The proceedings were brought by the FCA, the regulator of the defendant insurers, to determine issues of principle on policy coverage and causation under sample insurance wordings in the context of the significant business interruption losses suffered by businesses as a result of the Covid-19 pandemic.
At first instance the FCA had been successful on many of the issues, and the Supreme Court has now substantially allowed the FCA’s appeal on the issues it chose to appeal. The practical effect is that all of the insuring clauses which were in issue on the appeal will provide cover for the business interruption caused by Covid-19.
Herbert Smith Freehills acted for the FCA who advanced the claim for policyholders.
For our full analysis of the case please see this post on our Insurance Blog.
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