Supreme Court dismisses the FCA BI test case appeals
Today the Supreme Court delivered its ruling dismissing the appeals made by the FCA and a selection of Insurers following the original High Court ruling last September. As a reminder, this test case related to a minority of Insurance contracts where there had been an ambiguity over whether the Business Interruption section, and typically a disease or denial of access extensions thereof, provided cover for Covid.
Understandably, we have been contacted today by many Policyholders to check if this ruling relates to them. In all cases, it does not. Our Temporary Structure and Mobile Toilet Scheme wordings were both ones where there was clearly no cover. Both had extensions on the Business Interruption Section, and one Insurer did have a Compulsory Closure extension, but as is the case with the majority of Insurance wordings, the contagious disease cover related to a limited number of specified diseases (which did not include Coronavirus/Covid). The Denial of Access related to only to interruption following damage.
Further detail is provided in my previous website blog of 23rd September, which is still available.
I feel that it is also worth mentioning that almost all relevant Business Interruption extensions only relate to loss of profits resulting from the closure of the business’ own trading premises. Therefore, the ruling is likely to only be relevant to businesses who were forced by law to shut their premises such as pubs, restaurants, cinemas, bowling alleys and non-essential retail shops etc. Unfortunately, therefore hardly any suppliers to the outdoor event industry will be covered, even if they had had a disease extension, which gave cover for any notifiable disease.
Once again, it appears that the reporting of this by the media has been very misleading. Many headlines and articles have incorrectly, and in my mind irresponsibly, given false hope to business owners. Some articles give the impression that all small businesses will receive compensation. Most articles fail to mention that this only relates to those businesses who had Business Interruption cover, and of those only where there was an ambiguity in the policy wording. Furthermore, I have yet to see an article, which clarifies that this largely only relates to businesses whose own premises have been forced to shut.
As always I am very happy to explain matters further, and if you would like to discuss this, or indeed anything else, then please do contact me at any time firstname.lastname@example.org or 01962 774421.