Policyholders win Covid-19 Insurance Test Case

The High Court in England and Wales has handed down judgment today in the COVID-19 Business Interruption Insurance test case of The Financial Conduct Authority (“FCA”) v Arch and Others and has found in favour of the arguments advanced on behalf of policyholders by the FCA on the majority of the key issues. The decision means that the majority of businesses who held business interruption policies and suffered losses as a result of COVID-19 are entitled to be compensated for doing so, subject to the limits of their policy.

The FCA’s press release can be found here:


It is now expected that the decision will be appealed directly to the Supreme Court (being a ‘leapfrog appeal’), thereby cutting out the need for it to be heard in the Court of Appeal first.

Business Interruption Insurance is designed to cover a business for losses sustained during periods in which it cannot carry out business as usual due to an unexpected event beyond its control. However, many business owners who made a claim under their insurance policy following the government-ordered lockdown had their claims rejected by their insurers who stated that the terms of their policy did not cover losses caused by a worldwide pandemic.

It must be noted that this decision will not be relevant to all policy holders but does resolve any dispute in relation to the 21 different types of policy wording in the representative sample considered by the court.

Each insurance policy and insurance company will differ. Every policy will have its own nuances, terms, conditions and technicalities which can give rise to different interpretations.  The wording of the policy is crucial and the first thing that any business owner should do, if they have not already done so, is have their insurance policy reviewed by a legal professional to determine whether or not their policy contains a clause which provides cover for losses incurred as a result of COVID-19.

At McCartan Turkington Breen, we have been reviewing insurance policies and providing advices to our clients since the start of lockdown. If you would like a member of our Business Interruption Team to review your policy, please telephone our Business Interruption Team on 028 9032 9801 or contact us at the following email addresses: