25th June 2020

UPDATED GUIDANCE: Coronavirus & Business Interruption Cover (High Court Test Case - FCA Update)

By Richard Graham
Divisional Director - Claims & Risk Management
City of London skyline

In a previous article, we provided an update on the legal action being undertaken by the FCA against eight insurers with the aim of seeking judgment from the Courts to provide a much clearer view on policy coverage in respect of Covid-19. We promised that we would keep our clients up to date on key developments.

The latest update relates to clients that are (a) insured with one of the eight listed Insurers and importantly, are insured under one of the sample wordings included in the test case (Representative Sample of Policy Wordings).

Each of the eight insurers have now served their Defences in response to the FCA’s Particulars of Claim:

Defence of Arch Insurance (UK) Ltd 

Defence of Argenta Syndicate Management Ltd 

Defence of Ecclesiastical Insurance Office Plc and MS Amlin Underwriting Ltd 

Defence of Hiscox Insurance Company Ltd 

Defence of QBE UK Ltd 

Defence of Royal & Sun Alliance Insurance Plc 

Defence of Zurich Insurance Plc

Invitation to comment on the Defences

The FCA’s response is due on 3rd July and they have invited policyholders (insured under a policy wording that is included in the test case), Aston Lark and others to provide comments on the Defences, which they will take into consideration. The FCA have asked for comments to be provided by 3pm, 29th June (Monday).

The FCA is asking for:

  • Comments specifically on the Defences and ask for any comments to specify which paragraph of which Defence you are commenting on.
  • Comments that alert them to specific clauses or wording in your policy (as long as that specific policy is already part of the test case (see Representative Sample of Policy Wordings for further details).

  • Comments that you have received from one of the above insurers that are inconsistent with the interpretation put forward in a Defence.

Please email biinsurancetestcase@fca.org.uk stating only the word ‘Defences’ in the subject line of the email.

Invitation to speak with the FCA’s legal team

Additionally, the FCA has invited policyholders (and/or your representatives) and Aston Lark to speak directly with their legal advisors. Requests need to be made to the FCA by 5pm, 26th June (Friday).

Please email biinsurancetestcase@fca.org.uk stating only the word 'Meeting' in the subject line of the email and stating your availability in the body of the email.

What we are doing

Aston Lark is in the process of reviewing each relevant Defence. We will prepare a response where we identify any particular point that falls into any one of the above categories. Whilst we will carry out this exercise on behalf of all clients, we wanted to make you aware of the invitation in case you or your representative wish to contribute.

We will also arrange a telephone call with FCA’s legal advisors if we identify points that we believe would be best articulated verbally in addition to in writing.

For more information

For full details of the FCA’s most recent update, please see here

You may also wish to subscribe for email updates from the FCA – see here. 

If you have any questions, please do not hesitate to contact your usual Aston Lark contact.