Financial & Legal News

Business Interruption Insurance Claims receive a High Court Boost

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Many businesses in England and Wales have been affected by the Coronavirus pandemic but expected that their insurance policies would provide relief and assistance when times were difficult, however some are struggling to get them to pay up - now in a welcome development the High Court has ruled that losses arising from the COVID-19 pandemic are covered by certain business interruption insurance policies.

The test case brought by the Financial Conduct Authority (FCA) relates to the wording of a number of Business Interruption Insurance policies.

Covid-19 was identified and added to the Government’s list of notifiable diseases on March 5th 2020 and since then SMEs had been hoping insurance policies would help them out if they closed the business and profits were hit, but some insurance companies have been refusing to payout.

“Whilst the wording of specific insurance policies will still have to be considered against the Court's judgment it is now more likely that the arguments put forward by insurers for rejecting a claim may not be upheld,” said Commercial Litigation Solicitor, Asa Cocker.

The recent judgement in the High Court does give some relief to the many SMEs whose businesses have been affected by the pandemic and those who may have had to shut down for the duration.

Insurers had argued that the policies were not meant to cover such a situation but the test case stated that policy clauses dealing with infectious or notifiable diseases, or non-damage denial of access and public authority closures or restrictions, provided cover for losses resulting from the pandemic.

Twenty one sample policy clauses from eight insurers were considered and the court concluded that most, but not all, of the disease clauses provided cover.

“Specific insurance policies will still have to be considered against the judgement and the context of the business but it does seem that their arguments for not paying out are limited,” he added.

The policy wordings considered generally related to Disease, Prevention of Access/Public Authority Decision and other wordings and each one was individually challenged and refuted.

“Those pending claims should now be taken forward and businesses can expect to hear from their insurers soon, however it is sometimes the case that disputes will still take place.  In those cases, it is always advisable to contact a solicitor and we can consider the policy wording in your case and advise on how to pursue your claim if your insurers still refuse to payout.”

It has been estimated that 370,000 policyholders could be affected by this case, although an appeal may be launched.

For advice on all aspects of Business insurance, Business Interruption Loans and Commercial Litigation please call Asa Cocker on 0161 785 3500 or email

Please note that the information and opinions contained in this article are not intended to be comprehensive, nor to provide legal advice. No responsibility for its accuracy or correctness is assumed by Pearson Solicitors and Financial Advisers Ltd or any of its members or employees. Professional legal advice should be obtained before taking, or refraining from taking, any action as a result of this article.

This blog was posted some time ago and its contents may now be out of date. For the latest legal position relating to these issues, get in touch with the author - or make an enquiry now.

Written by Asa Cocker


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