Originally written by Timothy Adler on Small Business
Small businesses that bought policies from insurers specifically against disease celebrated today now that the High Court has sided with them.
The Financial Conduct Authority took a test case to the High Court, legally testing business interruption policies from eight insurers to see if they had to pay out.
Insurers argued that business interruption policies were null and void because Covid was not officially recognised as a disease when those policies were taken out.
But the High Court has ruled that insurers are liable to pay out in the majority of 21 different types of policy wording judges considered.
However, becasue each insurance policy must be considered on its own merits, this is far from a blanket rubber-stamp for insurers to pay out over Covid.
Fran Tremeer, a solicitor at Royds Withy King, predicted that any comfort for some businesses would be “short-lived” and that, despite being in a precarious situation since March, businesses will continue to be frustrated over uncertainty.
Indeed, insurers will continue to fight this all the way to the Supreme Court, predict lawyers. However, the result of any High Court appeal would not likely be handed down until 2021.
Stephen Netherway, head of insurance at law

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