On Friday 15th January, we saw a very important Supreme Court decision for small businesses.

The Financial Conduct Authority (FCA) previously brought the test case along with some insurers that agreed to take part, including Arch Insurance (UK) Ltd, Argenta Syndicate Management Ltd, Hiscox Insurance Company Ltd, MS Amlin Underwriting Ltd, QBE UK Ltd, RSA Insurance plc, and Zurich Insurance plc.

In the previous lockdown, many small businesses made claims through their business interruption insurance policies for loss of earnings when their businesses were forced to close. Many insurers refused to pay out for those claims and argued that the cover was not for such unprecedented restrictions and situations we currently face. A selection of the policy wording was to be reviewed and assessed by the courts and so, the test case was fast-tracked through the courts in order to obtain this crucial decision.

The Supreme Court allowed the FCA’s and Hiscox Action Group’s appeal and dismissed the insurers’ appeals. The Judgment finds in favour of the Claimants and it is thought that potentially 370,000 small businesses may be affected, although it is unlikely that all of those will have successful claims.

Small businesses might now be able to see light at the end of the tunnel in that if they have the correct cover, they may now receive a much-needed cash injection into their business. The insurance companies will be reviewing claims and, hopefully, businesses will be paid out in a timely manner.

It is important that you check whether your insurance policy includes ‘business interruption’ cover and if you have not done so already, you should urgently submit a claim as many policies have strict reporting times.

If you need any advice on what the Judgment might mean for you and your business, you can contact us on 0845 287 0939 and speak to one of our specialist team or submit your enquiry online.