On the 15th of January 2021 the Supreme Court published its ruling on a sample of 21 standard business interruption policies and whether they covered businesses that were impacted by the Coronavirus outbreak.
Last September the High Court’s judgement review said that most of the disease clauses and certain prevention of access clauses found that 12 policy types, from the sample of 21, provided cover that the pandemic and the Government and public response caused the business interruption losses. The six insurers affected by this ruling then appealed those conclusions for 11 of those policy types but the Supreme Court has dismissed those appeals.
The Supreme Court ruled that cover may be available for partial closure of premises (as well as full closure) and for mandatory closure orders that were not legally binding; that valid claims should not be reduced because the loss would have resulted in any event from the pandemic; and that two additional policy types from insurer QBE provide cover. This will mean that more policyholders will have valid claims and some pay-outs will be higher.
Initial estimates forsee that 7-10% of UK Leisure and Hospitality businesses will be covered by this finding.