UK Insurance and Reinsurance: COVID-19 FCA Non-damage Business Interruption Insurance Test Case

Summary

This practice note provides detailed guidance on and draws together the implications of the decisions of the Supreme Court, and also of the Divisional Court, in a test case that the Financial Conduct Authority (FCA) commenced in consultation with policyholders and insurers. Financial Conduct Authority v. Arch Insurance concerns non-damage COVID-19 business interruption claims and considers the extent to which business interruption coverage was available under a selection of ''non-damage'' COVID-19 business interruption extensions provided in a sample of policy wordings. Also discussed is, TKC v. Allianz, concerning a traditional business interruption policy, which requires business interruption losses to flow from physical damage to insured property.