Business Interruption Insurance Update

April 30, 2021

By Jonathan Lowe

Since my last article (please see here) there has been a good deal of press coverage to suggest that insurers are being slow to pay claims following the Supreme Court decision in FCA v Arch Insurance (UK) Ltd and others [2021] UKSC 1.

The FCA website continues to be an invaluable resource for businesses and lawyers and the latest update provides the details of the claims that have in fact been paid.  As at 13th April 2021 13,670 policyholders out of 35,438, who had had claims accepted, had received at least an interim payment. Therefore, it appears that there are more policyholders that have not received at least an interim payment than those that have.  However, payments totalling £599,790,926 have been made according to statistics provided by insurers.

Beyond these statistics the FCA website has also continued to provide very useful further information for all those involved in the handling of claims for business interruption losses.  In particular the following should prove to be extremely useful

For all those policyholders who have policies which require proof of the existence of Covid 19 within a certain radius of the insured premises, finalised guidance on how to provide such proof was published on 3rd March.

A list of business interruption insurance policies capable of responding to the Covid-19 pandemic following the test case was published on 12th March 2021

Whereas this information and guidance is very useful to practitioners and other advisers, the position remains that each claim must be considered on its own facts.

The Supreme Court is yet to finalise the order following its decision.  The High Court was able to seal its order setting out numerous declarations relatively quickly following the handing down of judgment, but the parties have been unable to agree on the form of order arising from the decision of the Supreme Court.  Submissions have been made in writing as to the form of order but no decision has yet been made.  It is to be hoped that once an order has been finalised and disseminated all parties may be able to move more swiftly towards resolution of outstanding claims.

Away from the test case, the decision of Mrs Justice Cockerill DBE in Rockliffe Hall Limited v Travellers Insurance Company Limited [2021] EWHC 412 (Comm) has provided a good example of a claim which failed due to the wording of the particular policy not being such as to provide cover.  The insurer was successful in its application to strike out the claim.  The achilles heel for the policyholder was the use by the insurer of a “static list” of diseases which circumscribed the definition of infectious disease, and which did not, and could not by analogy or wider argument, include Covid 19.


If you would like any advice or assistance in pursuing claims for business interruption please do not hesitate to contact Jonathan or his clerk, Joe Mawson.

Before transferring to the Bar in 2008 Jonathan was Head of Commercial Insurance at Keoghs.  He has a broad commercial practice but in particular has over 25 years’ experience in insurance law.