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FCA Business Interruption Test Case: are you covered?

In our previous blog article, we discussed the implications of the FCA Business Interruption test case on art market participants. This article is directed at our clients and other market participants and offers, without charge, to assess their business interruption insurance policies and provide a preliminary view on coverage in light of the recent High Court judgment.

By way of reminder, on 15 September 2020, the Financial Conduct Authority (FCA) handed down judgment in the Covid-19 business interruption test case. The FCA advanced claims for policyholders in the case which considered 21 sample wordings from eight insurers.  Whilst different conclusions were reached in respect of each wording, the Court found in favour of the FCA on the majority of issues.  The decision has been appealed by six of the eight insurers involved.  Ecclesiastical and Zurich did not appeal because the High Court’s judgment found that losses arising from the Covid-19 pandemic were not covered by those two insurers’ business interruption policies.  

Permission to appeal directly to the Supreme Court has been sought.  Permission is likely to be granted by the Supreme Court, however its decision is unlikely to be known until the end of the year at the earliest.

Whilst the High Court judgment provides clarity and guidance on business interruption insurance wordings, each policy needs to be carefully reviewed to see how the judgment can be applied to the individual policy. Any such review is not definitive and depends on the decision of the Supreme Court.  Nonetheless, there are advantages in checking one’s business interruption policy to assess if according to the High Court, the individual policy wording paves the way to a successful claim.  If it does, your underwriters may be open to a settlement now.  There are risks to both insureds and insurers in waiting for the decision of the Supreme Court.  Insurers may prefer to settle now rather than run the risk that the Supreme Court interprets business interruption policies in a manner that is more advantageous to the insureds than the interpretation of the High Court. 

We understand the impact that the Covid-19 pandemic has had on our clients and the wider art market. If you are an art market participant, have business interruption cover and suffered losses as a result of the outbreak of Covid-19, we can review, without charge, your policy to determine whether you have a claim based on the High Court judgment.

We have prepared a checklist of questions to consider when assessing the impact of the judgment on your own insurance position:

  1. Does your policy cover Business Interruption? If so, what does the policy cover precisely? Did you take out an extension of the standard Business Interruption cover?
  2. Which category or categories of wording considered by the Court apply(ies) to your policy? We set out the categories of policy wordings put before the Court in our previous blog.
  3. Does your policy contain any exclusion clauses affecting the Business Interruption cover?
  4. What is the maximum level of cover? Is this cap applied per event?
  5. What does your policy say about calculating loss, mitigation and how to make a claim?

If you would like to take up this offer, then please email us with your details, a copy of your policy and any relevant correspondence with your insurer or broker at: Please note that any provision of advice is subject to the completion of our client onboarding process.