The Financial Conduct Authority (FCA) has requested several insurers to clarify their position on COVID-19 related business claims before seeking guidance from the courts by way of declaratory judgment.
The FCA aims to create authoritative case law in anticipation of a flood of disputes over policy wording and COVID -19 cover. This step will indeed prove beneficial for policy holders and in particular smaller businesses who would simply be unable to finance such litigation themselves. It is hoped that the outcome of the FCA's intervention will be clarity on the wording and effect of a wider spectrum of COVID -19 related policies.
(Pan) Epidemic cover will usually require a link to a specified disease. As always with insurance policies, the devil is in the detail. COVID -19 being unknown when these policies were taken out will not be expressly mentioned. Some policies refer to the presence of a “notifiable diseases”. In the UK COVID-19 became a notifiable disease on 5 March 2020. How will this date relate to losses incurred before 5 March 2020? Other policies expressly include SARS. Does COVID -19 aka Sars Cov-2 fall within a SARS provision?
Read the FCA’s latest statement here: Business interruption insurance during the coronavirus pandemic - High Court test case
