To follow up on our post yesterday, an English court ruled in the test case regarding coverage of business-interruption losses during the COVID-19 pandemic. We will follow up with a post addressing the particulars of the 160-page decision.

The Financial Conduct Authority stated that “the judgment will bring welcome news for many policyholders.” Its press release states:

The judgment says 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 has also clarified that the Covid-19 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.

The ruling did not award any specific recovery or declare that any insurer was liable across all policies. And of course, as we said yesterday, the decision involves the specific language in the sample policies that the court considered and did not involve whether there was “physical loss or damage” to property.