A test case by the financial regulator should clarify where business interruption insurance policies should pay out, says Lauren Cormack

The covid-19 pandemic has caused loss and distress to many businesses. Their activities have been disrupted by the coronavirus legislation and government guid- ance; and the income streams of many businesses have been hit. It follows that a large number of claims are being made under the terms of business inter- ruption insurance (BII) policies.

The Financial Conduct Authority (FCA), as the regulator of UK insurance companies, has noted a lack of positive responses  by  insurers to claims made under BII policies. It is concerned about the basis upon which claims are being rejected.

Test case

The FCA is bringing an action before the High Court seeking a declaration which will allow it to provide clarity ...

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