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The Financial Conduct Authority (FCA) brought a test case earlier this year over the wording of business interruption (BI) insurance policies, which some insurers argue do not cover pandemics. The city watchdog previously said it was bringing the legal action following “widespread concern” over “the lack of clarity and certainty” for businesses seeking to cover substantial losses incurred by the COVID-19 pandemic and subsequent national lockdown. According to the regulator, the value of policies likely to be affected by the test case is about £1.2 billion.
The FCA selected a representative sample of 17 policy wordings used by 16 insurers, which were considered at an eight-day hearing in July.
Eight insurers agreed to assist the FCA by taking part in the test case, which the regulator has said it hopes will provide “clarity and certainty for everyone involved in these BI disputes, policyholder and insurer alike”.
Lord Justice Flaux and Mr Justice Butcher delivered their verdict this morning.
(More to follow)
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