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U.K. Supreme Court Rules Against Carriers in BI Lawsuit

The U.K. Supreme Court ruled that insurers should cover thousands of businesses sustaining losses from coronavirus lockdowns.
January 20, 2021

On Jan. 15, the U.K. Supreme Court ruled that insurers should cover thousands of businesses sustaining losses from coronavirus lockdowns. Six of the world's largest commercial insurers — Hiscox, RSA, QBE, Argenta, Arch, and MS Amlin — said business interruption policies did not cover widespread disruptions after Britain's first national lockdown in March.

The Financial Conduct Authority, which brought the test case, said it would work with insurers to ensure claims are settled quickly, now that insurers are required to pay, and to make interim payments if possible. Senior judges indicated that many payouts should be triggered after examining non-damage insurance policy clauses, which cover disease, denial of access to business premises, and hybrid clauses.

Insurance Information Institute (Triple-I) CEO Sean Kevelighan pointed out that the British policies in the case have crucial contractual differences from those in the U.S., so the applicability of the British High Court’s ruling is limited. Kevelighan said, “These are two differently worded types of policies.” Lawyers and academics said that the cases most likely to be influenced by the ruling are disputes brought by U.S.-based policyholders of U.K. insurers.

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