The UK’s High Court has upheld its judgement in favour of policyholders, announced in September, on the Financial Conduct Authority’s (FCA) business interruption insurance test case.

The group action lawsuit saw the financial regulator and a group of insurance and reinsurance companies seek legal clarity on whether insurers were obligated to pay out on business interruption (BI) claims related to the pandemic.

The FCA’s case against eight insurers was launched in June 2020 with the aim of clarifying whether 21 policy wordings, affecting potentially 700 types of policies, 60 insurers, 370,000 policyholders and up to £7.4 billion in insurance claims, covered disruption and government-ordered closures to curb the virus.

In September, the High Court ruled that insurers Hiscox & QBE must pay out disputed business interruption policies to policy holders in the events industry, which include live music venues, clubs, pubs and bars across the UK. An appeal was granted.

Specialist insurance broker NDML and the Night Time Industries Association (NTIA) worked collectively to support affected companies. NTIA CEO Michael Kill said the judgement was a moral victory for thousands of businesses with Hiscox Business Interruption Insurance: “[They] have been placed under unnecessary financial hardship because of the legal process that has been drawn out much longer than was necessary by insurers”.

He said, “We are extremely pleased that the Supreme Court has dismissed the insurers’ appeal claims and supported the rights of thousands of businesses to be able to claim against there BI insurance”

“We still have some detail to interpret on many of the other policies that have been reviewed by the Supreme Court.

“I would like to thank the FCA for its support throughout this process and the legal guidance of Philip Kolvin QC through a very dark period for many businesses. “It is now very important that insurers do the right thing and expedite the payment process.”