UK Supreme Court Ruling on FCA Business Interruption Test Case Handed Down
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- The UK Supreme Court has handed down its judgment in connection with the Financial Conduct Authority’s test case on business interruption insurance.
- Broadly speaking, the appeals of the FCA and the Hiscox Action Group were substantially allowed and those of the insurers were dismissed.
- The ruling is expected to have a considerable influence on the scale of business interruption related losses in the United Kingdom and other common law jurisdictions such as Canada, Australia, South Africa and New Zealand.
- The Supreme Court overruled the Orient Express case, which is likely to have wider implications for business interruption policies beyond the pandemic.
- The judgment is likely to result in potentially difficult discussions between cedants and reinsurers, and, in some cases, may result in litigation over the extent of coverage.