Covid-19 Business Interruption Test Case

Supreme Court judgment in FCA’s Covid-19 Business Interruption Test Case

Client Update

On Friday 15 January 2021, the Supreme Court handed down the much-awaited judgment providing the final determination on the question of whether certain Business Interruption clauses respond or not to COVID-19 losses. This is positive news and encouraging for a number of our clients. In the main, the Supreme Court rejected insurers’ appeals and accepted the FCA’s.

The full 114-page judgment can be read here. An easier summary of the judgment is also contained on the website of the FCA’s solicitors, Herbert Smith Freehills LLP.

It is important to note that the test case was focused on a minority of insurers and policy wordings that were unclear or where a potential gap was identified.  This meant the test case would not affect the majority of clients with Business Interruption losses. 

The Supreme Court’s final determination did not open the door to claims from clients beyond those identified as potentially affected and contacted by insurers earlier this year.  Instead, the judgment simply increased the scope of what could be included in a claim covered under a relevant clause. This is contrary to the sensational press articles that you may have seen.

We are currently digesting the full details to understand and determine what this means for each of our clients who have had a claim rejected, or those with wordings that were contested but have been awaiting the decision before claiming.

Next Steps

We will be contacting all affected clients again shortly. Our aim is always to support clients to make the insurer’s claims process as simple and painless as possible.

If you haven’t yet made a claim and or are still unsure, please contact our General Insurance Team on 01624 654000 or email