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) recently announced their intention to begin court proceedings to test how non damage business interruption insurance policies should respond to Covid-19.

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

Once a judgment is given in the test cases insurers will have to handle non-damage business interruption based on the ruling of the Court. Where this means that previous claims relating to Covid-19 would then have a different outcome, those claims will be re-visited and handled in line with the court’s decision. Equally, any claim not yet received will be addressed in line with the outcome determined by the court.

In the meantime, if you have already made a claim, you do not need to do anything and RSA will contact you once the court case concludes and judgment is given. 

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

9 June -  FCA started claim in the High Court

16 June - Case management conference, at which the court fixed the timetable for the case and other procedural matters

23 June - Insurers file Defences

26 June - Further case management conference, at which the court will deal with any outstanding procedural matters to ensure the case is ready for trial

3 July- FCA files Reply

1st half July - Skeleton arguments and replies served

20-23 July and 27-30 July - 8 day court hearing before Lord Justice Flaux and Mr Justice Butcher

The Court will deliver a judgment sometime after this and for further details in the meantime please refer to the FCA website (link below). 


I’m an RSA policyholder, what does that mean for me?

RSA is supportive of the test case as the best route to bring about the resolution of disputed business interruption claims for customers, and provide clarity to the insurance market about how claims should be considered.

Court judgments may affect the outcome of your claim if:

  • the specific wording of your policy is being reviewed as part of the test case, or;
  • there are points being considered by the test case that are relevant to your policy wording.

If the above situations apply to you, we will let you know this when we consider your claim. If you have already had a claim considered and a decision reached, this decision remains the position on your claim. However, we will write to you to let you if this changes once the Court gives its final judgment.

If your policy doesn’t include non-damage business interruption cover, your claim won’t be affected by the test case.


What if I have a claim in progress with you, or haven’t made a claim yet?

We will still consider all claims and give you our view on how your policy responds, including those relating to policies that are part of the test case. Our policies cover a wide range of risks and terms, so it’s important we are able to continue to review claims so we can make payments that are due.

Then, when the outcomes of the test case are known, we will review our claims decisions to ensure they are in line with the court’s judgments. We will contact you at this point to advise the impact of the decision on your claim, and if the position on your claim has changed, we will confirm next steps.

If you haven’t yet made a claim, and don’t before the conclusion of the test case and its rulings are made, we will handle your claim in line with the eventual court decision. You won’t need to do anything differently.


What if my claim has already been declined or I have made a complaint?

 If your claim has been declined, or if you have made a complaint and received a final decision letter, then the decision you have been given remains our final decision at the current time.

However, when the outcome of the test case is known, we will review our decisions to ensure they are in line with the court’s judgments. If the position on your claim or complaint has changed, we will contact you to confirm next steps.

You do not need to take any further action for this to happen.


Are my FOS rights affected?

If you are unhappy with the outcome of your claim or a complaint, you can still refer it to the Financial Ombudsman Service (FOS) free of charge.

You can find more information on the FOS here.


How can I stay informed?

 RSA will work with its partners to write to customers with relevant non-damage business interruption policies, to give details of how the case may affect their claims. If you could be affected, we will also write to update you when the outcome of the case is known.

We will also keep this page updated to reflect any key developments in the court proceedings.

You can also visit the FCA’s business interruption hub for more information.

You can also subscribe to email updates from the FCA on business interruption and the test case here.