Business Interruption Insurance: date set for court case result

Agents involved in a test case over their Business Interruption insurance will know the result next Tuesday morning.

The test case concluded in July after eight days, and involved a sample of 17 insurance policy wordings, collected by the Financial Conduct Authority.

The FCA brought the test case against eight insurance companies and the result is likely to affect claims by some 350,000 small and medium sized firms, including hundreds - possibly thousands - of estate and lettings agencies.

The FCA argued in court that the pandemic and its consequences, including lockdown, should be treated as a single cause of lost income for policy holders, thus triggering pay outs.

But the insurers asserted that the pandemic and its fallout had to be separated into components. Some of those components would not trigger pay outs.

Many estate agencies are believed to be amongst the thousands of companies disputing their insurers’ interpretations of liability under different Business Interruption policies; most insurers claim such policies do not cover closures forced by pandemics such as Coronavirus.

Agents contacting Estate Agent Today earlier this year said they believed their BI policies covered circumstances where there was an inability to enter and use normal business premises - for example, during the lockdown. 

Others told EAT their policies covered issues regarding instructions from national or local government to cease trading - again, relevant to the lockdown, they claimed.