COVID-19 Business Interruption Test Case – English High Court
Unlike New Zealand, many business interruption policies issued in England extended cover to interruption in consequence of a notifiable infectious disease.
Many of the underwriters of those policies declined their COVID-19 related claims.
The number of declinatures was sufficiently large, and the reasons for them were sufficiently contentious, that the English financial conduct regulator (The Financial Conduct Authority) brought proceedings in the English High Court on behalf of policyholders against eight underwriters to seek declarations about coverage under their policies. While this didn’t necessarily include all underwriters involved, it covered the majority of different policy wordings applicable.
The court allowed two action groups to appear at the hearing as well: the Hiscox Action Group, representing policyholders underwritten by the Hiscox Syndicate at Lloyd’s and the Hospitality Insurance Group Action, representing a large number of hospitality businesses whose claims had been declined.
The fact that 15 Queen’s Counsel appeared at the hearing, with some parties represented by two Queen’s Counsel, demonstrated the gravitas of the proceeding.
The court released its decision recently. We highlight some of the findings that give guidance to underwriters and claims adjusters alike about the correct approach to policy interpretation.