FCA REJECTS INSURERS’ DEFENCES IN COVID-19 BI TEST CASE

The Financial Conduct Authority (FCA) has rejected defences put forward by insurers in the High Court test case against eight carriers that have denied Covid-19 business interruption (BI) claims. In its ‘reply’ published Friday, the FCA said of the defences: “They depend upon adopting unduly restrictive meanings of particular words and approaches to proof as to the presence of Covid-19, and causal tests prescribing unrealistic, impractical counterfactuals, depriving the cover clause of much of its apparent and intended scope, none of which reflect what the reasonable person in the position of the parties would understand.” It also said the defences fail to take account of the nature of the insurance provided, which was generally aimed at small businesses and unsophisticated purchasers of insurance.