SOLVENCY II & BEYOND
BUSINESS INTERRUPTION INSURANCE: A TESTING TIME FOR THE INDUSTRY The touchpaper has officially been lit after the be ‘on cover’ after all. This also resulted in some Business Interruption Test case judgment was wordings where, depending on the business on handed down in mid September. cover and the circumstances of the policyholder, the policy might or might not pay. This raises In summary, the High Court ruled in favour of the technical complexity of moving forward policyholders on many clauses- but with some promptly for insurers. Insurers very well may significant nuances in favour of insurers- after a decide to appeal. In fact, ‘consequential hearings’ test case was launched by the Financial Conduct to decide which elements of the judgment could Authority to resolve contractual uncertainty potentially be challenged were scheduled for 2 in non-damage business interruption policy October. wordings. Shortly after the initial ruling the FCA issued The Court generally ruled in favour of claimants a firm, ‘Dear CEO’ letter stating that they also whose policies include‘disease’, ‘hybrid’ and‘trend’ expect all insurers to take a pragmatic, transparent wordings. Therefore the ruling has a significant and consistent approach to their interactions impact on around 370,000 policyholders covered with policyholders over any remaining evidence directly or indirectly by the 21 wordings that that applies to individual claims, rather than any were subject to the judgment. pending issue creating additional barriers or Although the Court ruled in favour of policyholders delays to paying valid claims. We are entering on many of the issues under scrutiny, the nuances a period where insurers will need to make to the judgment meant many claims might not significant decisions, with the regulator expecting page 10
