July/August Issue 57 - Flipbook - Page 12
NEWS
A LIFELINE FOR SMALL BUSINESSES
A judgement was given early this
week on the Financial Conduct
(FCA) test case brought on the
back of insurers disputing claims
made through business interruption
insurance policies. The case, The
Financial Conduct Authority v Arch
and Others highlighted the strain put
on a small business whose financial
woes were deepened having been
told by their insurers that COVID-19
Global pandemic phenomenon was not
included within policy clause wordings.
was ordered
to close
completely.
The test case
has also
clarified that
the Covid-19
pandemic
and the
government
and public
response
were a single
The FCA took a sample or policy
cause of
wordings, identifying 700 types of
the covered
policies across 60 different insurers and loss, which
affecting around 370,00 policy holders. is a key
requirement
In a 150-page judgment, the court
for claims to
found that most, but not all, of the
be paid even
disease clauses in the sample provide
if the policy
cover. It also ruled that certain denial
provides cover.
of access clauses in the sample
provide cover, but this depends on
Each policy needs to be considered
the detailed wording of the clause and
against the detailed judgment to work
how the business was affected by the
out what it means for that policy.
government response to the pandemic,
including for example whether the
In the advent of further local lockdown
business was subject to a mandatory
being put in place, businesses must
closure order and whether the business continue to keep detailed records of
12
their commercial dealings in a format that may
assist in bringing future insurance claims.
The judgment is now likely to be appealed however,
should you be in doubt as to what your Insurance
policy may or may not cover you should contact
a member of the Dispute Resolution team at
Backhouse Jones on 01254 828 300.
