You may be aware that on 17 September 2020 the High Court gave Judgment on the Insurers’ Test Case brought by the Financial Conduct Authority.
It considered detailed policy wordings from eight representative Insurers and the Judgment itself runs to over 150 pages dealing with each policy. Simply, the outcome is:-
If you were insured through Hiscox you should be paid out.
If you are insured by QBE you weren’t so lucky, the decision turns on the interpretation of the word “events”. The required loss had to result from interruption or interference with the business in consequence of “events” including an occurrence of the disease within a set distance from the premises. There needed to be a specific example which caused the loss rather than the pandemic as a whole.
The Court’s overall conclusion (mainly set out in addressing cover under an RSA policy wording) was that disease cover generally is not confined to the effects only of a local occurrence of a notifiable disease. Therefore, there is cover for the effects of the disease which may occur both within and outside the specified radius. So, a payment theoretically should be made.
The case has been appealed by some of the parties and is going direct to the Supreme Court. We have a number of cases where payment should be made to our clients and the longer this case drags on some policy holders, who are already struggling, may go under without a payment. It is hoped that the Supreme Court will consider the appeal by the end of the year.
If you have a policy that you would like us to review please contact Richard Dobson Mason of our Dispute Resolution Team who will be able to assist you further.
