FCA Test Case Supreme Court Judgment

Supreme Court hands down its judgment

On 15 January, the Supreme Court handed down its judgment on the FCA’s business interruption test case.

It remains the case that most SME business interruption (BI) policies are focused on property damage and only have basic cover for BI as a consequence of property damage, so are unlikely to pay out in relation to the COVID-19 pandemic and its effects.

Some policies contain ‘non-damage’ related extensions of cover for business interruption, such as infectious or notifiable diseases (disease clauses) and denial of access or public authority closure or restriction clauses (denial of access clauses). The FCA argued that some policy wordings with disease or denial of access clauses do provide cover.

Following the judgment, the FCA advised “The judgment says that most, but not all, of the disease clauses in the sample provide cover.  It also says that certain denial of access clauses in the sample provide cover, but this depends on the detailed wording of the clause and how the business was affected by the Government response to the pandemic, including for example whether the business was subject to a mandatory closure order and whether the business was ordered to close completely.”

Clients who have made claims that are affected by the test case will be contacted by their insurer to discuss what the judgment means for their claim.  The Association of British Insurers has stated that “All valid claims will be settled as soon as possible and in many cases, the process of settling claims has begun.

It is important to note that the Supreme Court judgment does not mean cover will apply in every circumstance or under every policy.

Since 15 January, many insurers have posted policyholder updates in response to the Supreme Court judgment.  We have indicated where an update has been provided since 15 January.  This page was updated on 25 January and will be reviewed regularly, so do check back from time to time.

We are continuing work with insurers to get a resolution as quickly as possible. You can visit the FCA’s business interruption hub for more information here.

FCA Test Case updates since 15 January

Ageas Insurance Limited *Updated


Allianz Insurance Plc *Updated

Allied World

Ansvar Insurance *Updated

Arch Insurance (UK) Limited *Updated

Argenta *Updated

Aviva Insurance Limited *Updated

AXA Insurance UK Plc *Updated

Axa XL *Updated

Camberford Law Limited

Canopius *Updated

Chaucer *Updated

Chubb European Group SE *Updated

CNA Insurance Company Limited

Commercial Express Quotes Limited

Congregational *Updated

Covéa Insurance plc *Updated

DTW 1991 *Updated

Ecclesiastical Insurance Office Plc *Updated

Ergo *Updated

Folgate Insurance Company Limited *Updated

GB Underwriting Ltd

Gresham Underwriting Limited *Updated

HCC Insurance Services Ltd *Updated

Hiscox Insurance Company Limited *Updated

Imperium Insurance Management Ltd t/as iFarm Underwriting *Updated

JRP Underwriting *Updated

Liberty Speciality Markets *Updated

Markel (UK) Ltd *Updated

Morton Michel Limited *Updated

MS Amlin *Updated

Nationwide Broker Services Limited *Updated

NIG *Updated

Pen Underwriting Limited *Updated

Probitas 1492

QBE UK Limited *Updated

R&Q Commercial Risk Services Ltd

Royal & Sun Alliance Insurance Plc *Updated

Thames Underwriting Ltd

Touchstone Underwriting Ltd *Updated


Zurich Insurance PLC *Updated

Unoccupied Property Market Response – Lockdown 3.0

Unoccupied premises due to COVID-19

It is important to distinguish between temporarily closed premises due to COVID-19 and previously longer terms unoccupied premises, the responses contained below are specifically for temporarily closed premises due to government guidelines and will not apply for premises that fall outside of the guidelines. For those customers whom have longer terms unoccupied exposures we recommend that they review their policy document and notify us immediately if they are struggling to adhere to any pertinent policy conditions. The ABI have released the following guidance for those businesses affected:

  • You should continue to check on your unoccupied premises regularly and carry out normal risk management processes unless prevented by any government or local restrictions.
  • If you are unable to visit your premises as set out in your policy, it is best to speak to your broker to discuss. Insurers will look to be flexible around the requirement for individuals to check on their temporarily unoccupied SME business premises regularly. This is as long as business owners have followed the risk management advice provided by their insurer and have taken reasonable endeavours to ensure the premises is suitably secure. However, in some cases where there are higher hazard risks your insurer will be able to advise on the appropriate arrangements for the property being unoccupied and ensure suitable action is taken. 
  • Restrictions will differ between nations and local areas and you should check you are adhering to the law and guidance of the relevant administration or local authority.
  • With the onset of winter, it is important to consider what additional safeguards are needed to prevent damage from occurring in colder weather. This may include turning off water, draining the heating system, or leaving the heating on at a temperature that will protect pipes from freezing and water damage occurring in the property. Further information on protecting the property from water damage is available here

The information below includes the unoccupancy position from specific insurers where we have obtained a response. If your insurer is not listed, please check your policy documents and/or contact your broker for more information. If your insurer is listed, please check your insurer’s occupancy position and if your property is going to be left unoccupied for more than the total consecutive days or you require additional clarity due to the specific circumstances then please make contact.
















Please be aware that the information from insurers may be subject to change.