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In a closely-watched test case brought by the Financial Conduct Authority, the High Court has ruled broadly in favour of policy-holders.
As a result of the recent COVID19 pandemic and subsequent lock-down, many businesses were forced to close and looked to their insurance policies to cover their losses.The test case was brought before the High Court by the financial ombudsman following over 400 complaints from policy-holders after many insurance companies rejected business interruption claims under "blanket denials of cover".Though insurers argued that these policies were never designed to cover such unprecedented restrictions, the judgment ruled that the COVID 19 pandemic and government response were a single cause of a covered loss, and that some insurance claims should have been paid.The ruling also sought to provide clarity on a representative sample of policy wordings and has the potential to affect over 370,000 policy-holders.David Bailey, Partner and Head of Dispute Resolution at Healys LLP comments:"This is a landmark decision in which many business owners have been thrown a lifeline by the court to allow them to continue in business. Affected policy holders will need to carefully consider their policy wording in conjunction with the judgement to see how the principles apply to their policy."Robert Johnson, Partner & Head of Professional Negligence at Healys LLP and his team are currently acting for a number of clients who have been affected by this recent decision. For more information or to speak with Robert about your matter, please contact Robert directly on 078 999 733 06 or email him at: Robert.johnson@healys.com