FCA Test Case

Business interruption claims and the Industry Test Case

In June 2020, 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 Industry Test Case.

Following the Judgment handed down by the High Court in September, permission to appeal to the Supreme Court was granted to the FCA, a policyholder group and six insurers, including Hiscox.

On 15 January 2021, the Supreme Court handed down its Judgment, comprising more than 100 pages of legal analysis. The full Judgment is available to view at on the Supreme Court’s website https://www.supremecourt.uk (external link). You can also view our Test Case Outcome Summary for Hiscox Policies here.

The Supreme Court largely confirms the outcome of the High Court's ruling that, except in rare circumstances, cover is restricted to Hiscox policyholders who were mandatorily closed. Fewer than one third of Hiscox’s 34,000 UK Business Interruption policies may respond as a result.

We welcome the clarity that the Judgment provides and the processing of claims has begun. Any issues not addressed by the Judgment will be assessed on a case-by-case basis as part of the normal insurance loss adjustment process for claims. This will apply to all government restrictions, whether national or local, provided that a relevant policy was in force at the start of the relevant lockdown period.

Please note, there is no need for you to take any further action at the moment. We are now in the process of assessing and paying claims, so if you have submitted a claim already, we will be in touch shortly to confirm next steps.

Q. Does the above apply to claims relating to losses caused by national and local restrictions?
A. Yes. Although the court proceedings considered only the March 2020 national lockdowns, the principles set out by the Supreme Court are applicable to all government restrictions, whether national or local.

Q. Why has this taken so long?
A. We know this has been an incredibly difficult period for businesses. It has always been our goal to provide clarity and certainty for customers and following the Supreme Court judgment we have started the process of assessing and settling claims. If you have submitted a claim already we will be in touch shortly to confirm next steps.

Q. What if I need to make a claim?
A. If you wish 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.