The UK FCA’s Test Case Concludes – What Next For Policyholders?

In recent weeks, the English High Court has conducted a trial in an unprecedented test case that the UK Financial Conduct Authority (the “FCA”) commenced to resolve legal issues concerning the interpretation of common business interruption (“BI”) policy wordings (the “FCA Action”). The judgment in the FCA Action is likely to address issues that will be among the keys to policyholders’ ability to recover indemnities for their COVID-19-related BI losses. The FCA has estimated that the case could affect 60 insurers, 700 types of policy, and 370,000 policyholders. This alert considers the background to the FCA Action, the scope of the issues that we expect may be resolved by the FCA Action, the implications of the FCA Action for policyholders, and related steps that well-advised policyholders may want to consider.