On 15 September 2020 the High Court gave the first instance judgment in the Covid-19 Test Case.

The Court has evaluated 19 sample policy wordings which were chosen to be representative of those in the market.  The sample wordings include two types of coverage:

  1. Coverage for infectious and notifiable diseases (except where the policy contains a list of diseases).
  2. Coverage for official actions or advice which affect a policyholder’s ability to access or use the insured premises.

In its judgment, the Court has explained that the availability of coverage depends upon a careful consideration of the language of each policy.  The Court has concluded that some wordings of each type will respond, while others will not.  The Court has also provided helpful guidance on the principles of adjustment.

The judgment is now likely to be appealed, with the next decision being taken in late 2020 or early 2021.

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.)

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

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