The Supreme Court handed down its judgment in the leapfrog appeal of the FCA Business Interruption Insurance Test Case. Although the lower court had largely found in favour of the FCA, both Insurers and the FCA appealed on various issues.

The Supreme Court broadly accepted the FCA appeals (with some qualifications).

Although it accepted some of the arguments made by Insurers, they ultimately concluded they did not affect the outcome of the appeal. Insurers’ appeals were all dismissed.

The outcome of this decision means that all insuring clauses that were being considered in the appeal will provide cover for losses caused by Covid-19 and these losses will not be reduced by reference to any Covid-19 related losses that occurred prior to policies being triggered.

The case provides new law on issues of causation and overturns the, arguably insurer-friendly, decision in Orient Express Hotels v Assicurazioni Generali SpA. The Supreme Court’s decisions have effectively widened the scope of cover available to policyholders, applying an even broader interpretation than the already generous application of the High Court.

It is anticipated that this decision could cover some 700 types of policies across over 60 different insurers, potentially affecting 370,000 policyholders.