In November 2020 we looked at how many businesses touched by the COVID-19 pandemic and subsequent lockdowns had been affected by the legal battle after insurers had failed to pay out under their business interruption insurance.

In September 2020, the Financial Conduct Authority (FCA) brought a legal claim on behalf of many policyholders who reported that insurers were refusing to pay out, despite having cover for losses caused by an unexpected event which caused them to shut. In some cases, these clauses were specifically worded to cover losses caused by ‘notifiable diseases’.

The court found in favour of many of these policyholders, but the relief was short lived as the insurers appealed the court’s decision to the Supreme Court, who heard the case in November 2020. After weeks of waiting, today the Supreme Court has handed down its judgment.

The Court has ruled in favour of the vast majority of policyholders, which will allow thousands of struggling businesses to claim compensation. The full judgment can be found here.

The Association of British Insurers (ABI) has said that insurers would be settling valid claims as soon as possible, which will be essential for many businesses who have been barely holding on amidst a third lockdown whilst they await the outcome of the Supreme Court hearing.

For many, today’s judgment will be just the lifeline they needed. Anyone with business interruption insurance should consult the terms and conditions of their policy and contact their insurers without delay.