The Supreme Court will this month hear an appeal of the Financial Conduct Authority’s business interruption insurance test case.
The test case launched by the watchdog against eight insurance companies was fast-tracked for an appeal earlier this month.
The FCA launched legal proceedings in June after it failed to find an agreement with the insurance sector on business interruption policies. Some small firms were thrown a lifeline in September when the High Court ruled that some insureds will be covered for losses caused by the pandemic.
But a number of other businesses have said they face ruin after attempts to claim compensation for losses were rejected by insurance firms.
The court ruled that losses arising from a general reduction in consumer demand and the government’s lockdown measures were said to be distinguishable and thus not covered.
The FCA sought to appeal some aspects of the judgment, as did insurers Arch, Argenta, Hiscox, MS Amlin, RSA and QBE, and the Hiscox Action Group of policyholders.
The watchdog is now seeking further clarification over whether 21 policy wordings cover disruption and government-ordered closures as a result of the pandemic. The case could affect around 700 types of policies, 60 insurance businesses and just under 400,000 policyholders.
The hearing will begin on 16 November and is expected to last four days.
Although the hearing has been expedited the appeal process has delayed payouts on disputed claims as businesses prepare for a second lockdown starting this week.