FCA v Arch Insurance (UK) Ltd
[2021] UKSC 1
Independent editorial summary — not the official judgment. Read the full judgment via the source link.
Ratio Decidendi
Business interruption insurance policies that cover losses arising from notifiable diseases or government-mandated closures may cover losses caused by COVID-19, depending on the policy wording. The 'but for' test of causation is not appropriate for disease clause policies.
Facts
The FCA brought a test case on behalf of policyholders to determine whether various types of business interruption insurance policies covered losses from COVID-19 and associated lockdowns.
Judgment Summary
The Supreme Court largely upheld the FCA's arguments, finding that many policy wordings did cover COVID-19 losses. Disease clauses did not require the policyholder to show that the particular case of disease in the relevant area was the proximate cause of the business interruption.
Key Quotes
"Although the court below concluded that each of the individual cases of COVID-19 which had occurred by any given date is properly regarded as a separate but equally effective cause of Government action taken at that date, it does not appear to have followed through the logic of its analysis."
— Lord Hamblen and Lord Leggatt(verbatim, verified against the judgment)
Subsequent Treatment
The definitive case on COVID-19 business interruption insurance in the UK.
What To Do Next
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