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The devil in the detail of business interruption insurance

Compliance Monitor

The devil in the detail of business interruption insurance

TheHigh Court has given its view in FCA v Arch Insurance on a small proportionof all the wordings in business interruption policies – but years of wranglingover Covid-19-related claims could lie ahead. Adam Samuel dissects thejudgment and suggests ways forward.

The Financial Conduct Authority’s ongoingnightmare with business interruption insurance, reflected in the High Court’s15 September decision on its test case, has its origins in a Financial ServicesAuthority bungle in light of the Twin Towers plane crashes of 9/11. After theWorld Trade Centre was destroyed, nobody knew whether one of the towers wasinsured at all, let alone the scope of the coverage involved. It took a lawsuitto resolve. The FSA, which oversaw the defendant insurers, started its ‘contractcertainty’ initiative in order to prevent a repetition. Unfortunately, itannounced that contract certainty did not involve insurance policies actuallybeing comprehensible to those being insured.

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