On January 15, the U.K. Supreme Court released a ruling in favor of policyholders for a business interruption (BI) test case appeal, providing clarity on some key contractual uncertainties for pending claims. The original case was brought by the country's Financial Conduct Authority to the U.K. High Court on behalf of affected businesses.
While the findings of the verdict were highly anticipated by insurers and policyholders in the U.K., the ruling is not an indicator to the BI litigation landscape in the U.S., according to Insurance Information Institute (Triple-I) CEO Sean Kevelighan. As reported by The Wall Street Journal, Kevelighan makes clear that "the British policies in question and typical U.S. policies have key contractual differences that would limit the applicability of the ruling."
To date, there has been a growing list of court decisions in state courts across the U.S. in favor of insurers, affirming BI policies do not cover COVID-19 shutdowns. Direct physical loss or damage must occur for a BI claim to be triggered, and government orders do not constitute direct physical loss or damage to property.
For more information and resources, go to fairinsure.org or reach out to the Triple-I for more info.