The Supreme Court recently ruled on the insurance test case brought by the Financial Conduct Authority (FCA) against Arch and Others. This was a decision that affected those who had procured business interruption insurance and had made claims against their insurers in relation to the detrimental effects of the covid pandemic on their businesses. The FCA was advancing claims for policy-holders, considering 21 lead example wordings from eight insurers.

The decision of the High Court at first instance, given on 15 September 2020, was favourable to the FCA, which succeeded on many of the issues. Shortly thereafter the insurers gave an indication of their intention to appeal against this decision, arguing that the financial effects of the covid pandemic fell outside the policy wordings. The appeal proceeded directly to the Supreme Court, thus leapfrogging the Court of Appeal. The Supreme Court delivered its decision and judgment on 15 January 2021, unanimously dismissing the insurers’ appeals and allowing all four of the FCA’s appeals (in two cases) on a qualified basis.

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