Most small and medium enterprises policies only have cover for business interruption as a consequence of property damage.
But some policies also cover BI from other causes, in particular infectious or notifiable diseases (‘disease clauses’) and prevention of access and public authority closures or restrictions (‘prevention of access clauses’). In some cases, insurers have accepted business interruption claims liability arising as a result of Covid under these policies. On Friday (15 January 2021) the Supreme Court has now ruled against insurers who did not.
The judgment means that more policyholders will have valid claims and some pay-outs will be higher.
The FCA will be working with insurers to ensure they quickly pay claims that the judgment says should be paid, making interim payments where possible.
*FCA v Arch Insurance (UK) Ltd and others  UKSC 1 (15 January 2021).
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