Insurers take business interruption case to U.K. Supreme Court
The U.K. Supreme Court is considering if it is incorrect to assume that insurance coverage would be unlimited during a pandemic.
On Nov. 16, the U.K. business interruption insurance test case appeal began with several major insurance companies claiming to the U.K. Supreme Court that it is inappropriate to assume there could be unlimited coverage during a pandemic. The appeal was fast-tracked to the court for a four-day hearing.
Earlier this fall, a lower court found largely in favor of the Financial Conduct Authority (FCA) and insureds, ruling that some insurers had wrongly rejected business interruption claims connected to the COVID-19 pandemic. Several insurers appealed parts of the ruling that they lost, maintaining that they are paying valid claims and that if they were required to pay all claims, despite the validity, the insurance industry would collapse.
The test case revolved around whether more than 20 different policy wordings should cover disruptions spurred by the coronavirus, potentially affecting 700 types of policies, 60 insurers, hundreds of thousands of policyholders, and billions of pounds in claims.
Similar to other business interruption suits around the world, the test case includes arguments from the insurers that “prevention of access” clauses do not apply to government restrictions, and that disease clauses were not designed to, and do not, cover a nationwide pandemic.
Despite differences between U.S. and U.K. laws and courts, attorneys and insurance professionals in the U.S. are paying close attention to this test case.
More like this: