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FCA insurance test case: What Covid-19 ruling means for you?

What does the court ruling mean for you?

The judgement decided on September 15 is complex and deals with many issues. 

Essentialy to establish liability under the representative sample of policy wordings, the FCA argued for policyholders that the ‘disease’ and/or ‘denial of access’ clauses in the representative sample of policy wordings provide cover in the circumstances of the Covid-19 pandemic, and that the trigger for cover caused policyholders’ losses.

The judgment outlines that most, but not all, of the disease clauses in the sample provide cover. 

It also says that certain denial of access clauses in the sample provide cover, but this depends on the detailed wording of the clause and how the business was affected by the Government response to the pandemic, including for example whether the business was subject to a mandatory closure order and whether the business was ordered to close completely.

The test case also clarified the coronavirus pandemic and the Government and public response were a single cause of the covered loss, which is a key requirement for claims to be paid even if the policy provides cover. 

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