FCA Test Case

Business interruption claims and the Industry Test Case

In June, the Financial Conduct Authority (FCA) commenced Court proceedings to seek clarity about the application of certain non-damage business interruption policy wordings to losses resulting from the Covid-19 pandemic. Hiscox was one of eight insurers that had some of its business interruption policy wording considered by the Court as part of the FCA Test Case.

The High Court's judgment was issued on 15 September and the full judgment is available for you to view (external link) on the FCA's website, along with a summary of the proceedings to date. In summary, the High Court held that there could be cover for some of Hiscox's policyholders in certain circumstances. Each customer's claim is different and the outcome of each claim will depend upon the customer's policy, the type of business they operate and their individual circumstances.

The FCA, the Hiscox Action Group and six insurers (including Hiscox) were subsequently granted permission to appeal to the Supreme Court, and that hearing finished on 19 November 2020. We now await the Court’s judgment, which is currently expected no later than mid-January 2021.

Extensive work is being undertaken to enable the efficient processing of claims, however, a final judgment is required before this can begin. This applies to claims arising from local and national lockdowns.

Please note, there is no need for you to take any further action at the moment - we will contact you as soon as possible after the outcome of the Supreme Court hearing.

In the meantime, please refer to our frequently asked questions:

Q. What does the Judgment of the 15 September mean?
A. In summary, the High Court held that there could be cover for some of Hiscox’s policyholders in certain circumstances. Each customer’s claim is different and the outcome of each claim will depend upon the customer’s policy, the type of business they operate and their individual circumstances.

Q. What impact will an appeal have?
A. The FCA, the Hiscox Action Group and six insurers (including Hiscox) were recently granted permission to appeal to the Supreme Court. As a result, the legal position and findings of the High Court as set out in the judgment may still be amended by the Supreme Court. In light of this, we are not yet in a position to progress claims.

Q. Does the above apply if my claim relates to losses caused by the second national lockdown, or by a local lockdown?
A. Yes. This applies to claims arising from both local and national lockdowns, including the national restrictions that come into force in England on 5th November.

Q. Why is this taking so long?
A. We know the last few months have been incredibly difficult for businesses and our goal has always been to provide clarity and certainty for customers on the application of their policy. Like others in the industry, we are working as quickly as possible to achieve this and continue our preparations to ensure that once we have a final judgment on any appeal, we can deal with all claims smoothly and efficiently.

Q. When will we know the outcome of an appeal?
A. We do not know exactly when the Supreme Court will publish its judgment, but we expect this to be no later than mid-January 2021.

Q. What does this mean for my claim?
A. Due to the issues that may be subject to appeal we cannot provide any further clarity at this stage. We will understand more about what this means for your claim once we know the outcome of the Supreme Court hearing. There is no need for you to take any further action at the moment – we will contact you as soon as possible after the Supreme Court publishes its judgement.

Q. What if I need to make a claim?
A. If you want to submit a claim now, you can do so by following this link at claims.hiscox.co.uk.

You will need to submit a separate claim for each lockdown period.

We have also set up a dedicated business interruption phoneline, 01206 773 941, which is open 0900 – 1730 / Monday to Friday.