RSA Insurance : Information about the FCA Business Interruption test case

What is the test case?

The Financial Conduct Authority (FCA) announced in June its intention to begin court proceedings to test how non damage business interruption insurance policies should respond to Covid-19.

The proceedings reviewed a representative sample of policy wordings to determine whether they provide cover for Covid-19 and in what circumstances, and the outcome will inform the assessment of policies and claims for all providers of business interruption cover.

The Court hearing has now concluded and we await the outcomes. A summary of its stages can be found at the end of this page. It is possible that the judgment or parts of it could be appealed before a final resolution is reached.

Once final resolution of the test case has been achieved, we will promptly assess non-damage business interruption claims based on the rulings. Where this means that previous claims relating to Covid-19 would then have a different outcome, those claims will be re-visited and handled in line with the Court's decisions. Equally, any claim not yet received will be addressed in line with the outcomes determined by the Court.

RSA is supportive of the test case as the best route to bring about the resolution of disputed business interruption claims for customers, and provide clarity to the insurance market about how claims should be considered.

I'm an RSA customer with a business interruption claim, what does that mean for me?

Court judgments may affect the outcome of your claim if:

• the specific wording of your policy is being reviewed as part of the test case, or;
• there are points being considered by the test case that are relevant to your policy wording.

If the above situations apply to you, we have already been in touch to advise you of this. We will write to you again as soon as final resolution of the issue or issues that affect your claim are known. At that point, we will let you know whether the outcome affects the decision made on your claim and what the next steps will be. If your policy doesn't include non-damage business interruption cover, your claim won't be affected by the test case.

What if I have a claim in progress with you, or haven't made a claim yet?

We will still consider all claims and give you our view on how your policy responds, including those relating to policies that are part of the test case. Our policies cover a wide range of risks and terms, so it's important we are able to continue to review claims so we can make payments that are due.

Then, when the final outcomes of the test case are known, we will review our claims decisions to ensure they are in line with the Court's judgments. We will promptly contact you at this point to advise the impact of the decisions on your claim, and if the position on your claim has changed, we will confirm next steps.

If you haven't yet made a claim, and don't before the conclusion of the test case and its rulings are made, we will handle your claim in line with the eventual Court decisions. You won't need to do anything differently.

What if my claim has already been declined or I have made a complaint?

If your claim has been declined, or if you have made a complaint and received a final decision letter, then the decision you have been given remains our final decision at the current time.

However, when the test case reaches final resolution, we will promptly review our decisions to ensure they are in line with the Court's judgments. If the position on your claim or complaint has changed, we will contact you to confirm next steps.

You do not need to take any further action for this to happen.

Are my FOS rights affected?

If you are unhappy with the outcome of your claim or a complaint, you can still refer it to the Financial Ombudsman Service (FOS) free of charge.

You can find more information on the FOS here.

How can I stay informed?

If you have a claim or complaint that is potentially affected by the test case, we will write to you again to let you know whether the outcome affects the decision made on your claim and what the next steps will be.

We will also keep this page updated to reflect key developments including the decisions of the Court when they are known.

You can also visit the FCA's business interruption hub for more information.

You can also subscribe to email updates from the FCA on business interruption and the test case here.

A timeline of the test case:

The test case began on 9th June 2020 and the anticipated timetable for its duration is as follows:

9^th June - FCA started claim in the High Court

16^th June - Case management conference, at which the court fixed the timetable for the case and other procedural matters

23^rd June - Insurers filed Defences

26^th June - Further case management conference, at which the court dealt with outstanding procedural matters to ensure the case was ready for trial

3^rd July - FCA filed Reply

1st half July - Skeleton arguments and replies served

20^th - 23^rd July and 27^th - 30^th July - 8 day court hearing before Lord Justice Flaux and Mr Justice Butcher

The Court will deliver its judgment sometime after this. For further details in the meantime please refer to the FCA website.