Information about the FCA Business Interruption test case

We recognise the adverse impact that Covid-19 is having on businesses, and that customers with Business Interruption insurance are keen to understand if their insurance policy will respond. This page contains information about the FCA Business Interruption test case.

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What is the test case?

The Financial Conduct Authority (FCA) announced in June its intention to begin court proceedings to test how non damage business interruption insurance policies should respond to Covid-19.

The proceedings reviewed a representative sample of policy wordings to determine whether they provide cover for Covid-19 and in what circumstances, and the outcome will inform the assessment of policies and claims for all providers of business interruption cover.

The Court has now delivered its judgment and you can find details of it here. You can also visit the FCA’s business interruption hub for more information here.

 

What happens next?

We, alongside other insurers and the FCA, are now reviewing this judgment. If any of the parties to the case determine that there are aspects of the judgment they wish to appeal, they will seek permission to do so from the court.

Should an appeal take place, the position on the cover available under a policy including any existing claims will remain unchanged by the judgment until that appeal process has concluded.

RSA is committed to paying claims as quickly as possible as and when legal processes relevant to them are concluded. If the final outcome of this case changes the position on available cover, we will revisit and process claims in line with that decision.

We will get in touch with policyholders again once we know whether any appeal will take place. In the meantime, policyholders do not need to take any further action.

 

Frequently asked questions

Where can I find the judgment?

The Court has now delivered its judgment and you can find details of it here. You can also visit the FCA’s business interruption hub for more information here.

 

Will RSA now be paying claims?

Until appeals are confirmed or ruled out, the legal process is ongoing, so our position on outstanding claims and cover available under RSA policies does not change. We will communicate with all affected customers to confirm this today.

We are committed to continuing to keep our customers informed on the status of their individual claims, and processing them as quickly as possible once a final legal position is reached.

 

Do I need to resubmit a claim?

No, if you have already sent us your claim we will review it once the relevant legal processes are concluded. We will keep you updated on the status of your claim throughout.

 

I have not made a claim yet. What information do I need to send you to make a claim now?

If you have already made a claim then you do not need to do anything further at this stage and we will keep you updated as the next steps in the legal process progress. If you have not made a claim, and wish to make one, then please speak to your broker who will help you with this.

For More Th>n business customers we need your name, address, policy number and details of what claim you wish to make and your contact details.

 

When will we know if there will be an appeal?

This will be determined by the court in a hearing during October.

 

How long would an appeal take?

This would be determined by the court, but all parties are keen to continue to move the process to resolution as quickly as possible.

 

What has the FCA said about the case?

Please visit the FCA’s business interruption hub here for more information: https://www.fca.org.uk/firms/business-interruption-insurance

 

Can I still complain to the Financial Ombudsman Service?

Your right to use the FOS is not changed by this test case. You will first need to direct your complaint to RSA  at crt.halifax@uk.rsagroup.com. We then have eight weeks in which to provide you with a Final Response Letter. If, having received that, you remain dissatisfied then you can refer your complaint to the FOS.

 

I think my broker sold me the wrong cover, what do I do?

This is a matter you should discuss direct with your broker.

 

A timeline of the test case:

The test case began on 9th June 2020 and the anticipated timetable for its duration is as follows:

  • 9th June -  FCA started claim in the High Court
  • 16th June - Case management conference, at which the court fixed the timetable for the case and other procedural matters
  • 23rd June - Insurers filed Defences
  • 26th June - Further case management conference, at which the court dealt with outstanding procedural matters to ensure the case was ready for trial
  • 3rd July - FCA filed Reply
  • 1st half July - Skeleton arguments and replies served
  • 20th – 23rd July and 27th – 30th July - 8 day court hearing before Lord Justice Flaux and Mr Justice Butcher
  • 15th September - Court publishes its judgment.