We know that many of Arch’s policyholders are facing tough times.  Many businesses have been ordered to close, and many of those which have stayed open have experienced dramatic falls in trade.

To clarify the coverage which is available to policyholders of non-damage business interruption policies, Arch has agreed to participate in a High Court Test Case with seven other insurers and the Financial Conduct Authority (FCA).

To help explain the Test Case we have prepared the following Q&A.

What is the purpose of the Test Case?

The Test Case is designed to achieve the maximum clarity for the maximum number of policyholders, by seeking a binding court determination on the meaning and effect of key provisions in 19 representative policy wordings written by the insurer parties.

The Test Case will allow the FCA to act as an advocate for consumers and make arguments to the court.

Although the Test Case is taking place in England, the court’s decision will provide authoritative guidance for policies issued in all parts of the UK.

What is within the scope of the Test Case?

The sample wordings in the Test Case were chosen to be representative of those in the market.

They provide coverage for:

  • Infectious and notifiable diseases (except where the policy contains a list of diseases).
  • Official actions or advice which affect a policyholder’s ability to access or use the insured premises.

The Test Case will consider the coverage provided by the sample wordings and other important issues, such as:

  • Policy exclusions.
  • The relevance of other factors affecting businesses during the interruption period.

What is beyond the scope of the Test Case?

The Test Case will not consider:

  • Policies which insure only damage to property.
  • Policies which insure only a closed list of diseases.
  • Policies which insure only diseases occurring at insured premises.
  • Causation issues specific to loss of rent claims.
  • The quantification of claims.

When is a decision expected?

The Test Case began on 9 June 2020.  A decision is expected in the autumn.

How will the Test Case affect Arch’s policyholders?

Policyholders should not assume that their policy will respond simply because it has been included in the Test Case.

During the Test Case Arch will continue to handle claims as normal.  We will notify all policyholders whose claims may be affected by the outcome of the Test Case, and where we consider that coverage responds, policyholders will be given the option to settle their claims or await the outcome of the test case.

The handling of complaints affected by the Test Case, and all associated time limits for you to act, will be suspended pending the conclusion of the Test Case.

At the end of the Test Case Arch will apply the court’s decision to all outstanding claims and complaints other than those which have been referred to the Financial Ombudsman Service (FOS).

Where can I obtain further information?

Full details of the Test Case are available on website of the FCA, where you can also register for email updates:

https://www.fca.org.uk/firms/business-interruption-insurance.

Other information on claims and complaints is available on the website of the Financial Ombudsman Service:

https://www.financial-ombudsman.org.uk/businesses/complaints-deal/complaints/coronavirus-covid-19-information-businesses.