FINANCIAL CONDUCT AUTHORITY V ARCH INSURANCE (UK) LTD AND OTHERS

[2021] UKSC 1, Supreme Court, Lord Reed, Lord Hodge, Lord Briggs, Lord Hamblen and Lord Leggatt, 15 January 2021

Insurance (business interruption) – COVID-19 – Notifiable disease – National lockdown – Whether business interruption policy extensions responded to loss

This was a test case brought by the Financial Conduct Authority to determine a variety of preliminary issues relating to the coverage of non-damage extensions in business interruption policies to the various restrictions imposed upon business following the outbreak of the COVID-19 pandemic. The test case covered some 700 policies issued by over 60 different insurers and affecting up to 370,000 policyholders. The judgment reviewed 21 policies falling into three broad categories: "disease clauses"; "access clauses" covering prevention of access and similar perils; and "hybrid clauses" including both elements. The Divisional Court at first instance found in favour of some but not all of the policyholders.