Irwin Mitchell: Business Interruption insurance – businesses win big in Supreme Court ruling

On January 15, the Supreme Court handed down its highly-anticipated appeal judgment in the Financial Conduct Authority’s business interruption (BI) test case.

The Supreme Court dismissed the appeals of the insurers and, like the High Court, found largely in favour of insured businesses. This means thousands of policyholders may now be able to recover loss caused by Covid-19 and the decision could therefore provide a vital lifeline for businesses.

Irwin Mitchell said it was important to stress that the Supreme Court’s decision is final. This means affected businesses now have clarity as to whether their BI policies cover their loss, and insurers will not be able to challenge the decision.

Following the judgment, Irwin Mitchell looked at what the Supreme Court found and what it means for businesses.

Senior associate Stephanie Reeves, who is leading the firm’s response on the issue, and trainee solicitor Ted Powell, who is supporting her, said: “The Supreme Court decision is strikingly positive for businesses and many policyholders will now be covered for Covid-19 related loss who were not covered under the High Court’s decision.

“The judgment is legally binding on the eight insurers that were parties to the test case and it also provides authoritative guidance for the interpretation of similar wordings. In addition, it cannot be appealed by any party. As a result, businesses now have much needed clarity as to whether they will be covered.

“It will be crucial for businesses to reconsider their BI policy wording in light of the Supreme Court’s decision. Every policy is worded differently and every business is different, so businesses should seek independent legal advice as to the interpretation of the judgment in light of their specific circumstances.”

Read more here.

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