COVID-19 Business Interruption Claims: The Latest Court Rulings

COVID-19 Business Interruption Claims: The Latest Court Rulings

General Claims Information
January 08, 2025•3 min read

COVID-19 Business Interruption Claims: The Latest Court Rulings
The COVID-19 pandemic created unprecedented challenges for businesses, with many facing forced closures, operational restrictions, and significant financial losses. Business interruption insurance, designed to protect against such losses, became a critical lifeline for many organisations. However, numerous insurers denied claims, leading to widespread disputes and landmark legal rulings.

This article explores the latest court decisions affecting business interruption claims, what they mean for policyholders, and how businesses can ensure they receive the compensation they’re entitled to.

Understanding Business Interruption Insurance

Business interruption insurance typically provides coverage for financial losses resulting from events like natural disasters, fires, or theft. The pandemic brought unique challenges, as many policies contained unclear wording about whether they covered losses caused by infectious diseases or government-imposed lockdowns.

Key disputes revolved around:

  • Disease Clauses: Did the policy specifically cover losses caused by infectious diseases?

  • Prevention of Access Clauses: Did the government’s restrictions constitute an event that prevented access to business premises?

  • Causation: Was COVID-19 the direct cause of the losses, or were other factors involved?

Key Legal Rulings

The FCA Test Case (2021)

The Financial Conduct Authority (FCA) brought a landmark case to clarify whether certain business interruption policies covered losses caused by COVID-19.

 

The UK Supreme Court ruling largely favoured policyholders, finding that many disease and prevention of access clauses did apply to pandemic-related losses.

 

This ruling forced insurers to reassess denied claims and provided a framework for resolving future disputes.

 

Subsequent Court Decisions

Following the FCA Test Case, several individual claims have been brought to court, testing the principles established in the ruling.

Courts have further clarified the application of causation and how policies should respond to pandemic-related losses.

 

Ongoing Appeals

Some insurers continue to challenge rulings, arguing that their policies were not intended to cover pandemics. These appeals may influence how claims are resolved in the future.

What These Rulings Mean for Policyholders

Increased Clarity

The FCA Test Case has provided policyholders with greater certainty about whether their policies cover pandemic-related losses.

 

Renewed Claims Opportunities

Businesses that previously had claims denied are now revisiting their policies and submitting new claims based on the legal precedents established.

 

Strengthened Policyholder Rights

The rulings reinforce the principle that insurers must honour their contractual obligations and provide clear, unambiguous policy wording.

Steps to Take If Your Claim Was Denied

1.     Review Your Policy

o   Check the wording of your business interruption policy, focusing on clauses related to disease and prevention of access.

 

2.     Seek Professional Advice

o   If you’re unsure whether your policy applies, consult with a specialist claims management company or solicitor to assess your case.

 

3.     Challenge the Decision

o   Insurers who denied claims before the FCA Test Case ruling may now be obligated to reassess those decisions.

 

4.     Act Promptly

o   Time limits may apply for submitting claims or appeals, so it’s essential to act quickly.

How MFN Claims Can Help

Navigating the complexities of business interruption claims requires expertise and persistence. MFN Claims provides professional claims management services to help you:

 

Review your policy in light of the latest legal rulings.

 

Gather evidence to support your claim, including financial records and correspondence with your insurer.

 

Work with solicitors to challenge unfair denials and secure the compensation your business deserves.

The legal landscape surrounding COVID-19 business interruption claims is evolving, with court rulings offering new hope for businesses seeking compensation. If your claim was denied, now is the time to act. By understanding your rights and working with experts, you can recover the financial support your business needs to thrive.

MFN Claims is a trusted claims management company dedicated to helping individuals secure the compensation they deserve. With expertise in workplace accidents, military hearing loss, and mis-sold investments, we work alongside leading UK solicitors to ensure every client receives professional, compassionate, and effective support. As a company regulated by the Financial Conduct Authority (FCA), we uphold the highest standards of transparency, professionalism, and ethical conduct. At MFN Claims, we are committed to delivering results that make a real difference in our clients' lives.

MFN Claims

MFN Claims is a trusted claims management company dedicated to helping individuals secure the compensation they deserve. With expertise in workplace accidents, military hearing loss, and mis-sold investments, we work alongside leading UK solicitors to ensure every client receives professional, compassionate, and effective support. As a company regulated by the Financial Conduct Authority (FCA), we uphold the highest standards of transparency, professionalism, and ethical conduct. At MFN Claims, we are committed to delivering results that make a real difference in our clients' lives.

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