BIBA comments of FCA test case judgement

Covid-19 and the application of insurance in relation to Business Interruption insurance created a complex situation requiring legal consideration of the many different issues of proximate causation and wording interpretations. That is why, from the outset, we welcomed the FCA intervention in bringing this test case and the ultimate clarity the judgement will bring (once any appeal process is complete).

We recognise how important this case is for customers and the insurance industry alike and we will study the judgement in detail over the coming days while waiting to see if any of the parties appeal.

Meanwhile, the outcomes do not prevent individual policyholders from pursuing issues through the courts, or eligible complainants from taking a complaint to the Financial Ombudsman Service.

Looking forwards, it is important that we have a solution so that customers can be protected in the event of another pandemic. It Is our belief that that a public-private partnership would be the best means.

Already in the UK we have been looking at a model called Pandemic Re and many other nations are also considering these types of shared risk models.

Pool Re, which is the UK’s answer to terrorism risk, provides a working example of how such a partnership could work in practice.

Authored by BIBA