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Business Interruption Insurance update - is my business covered? Five key points

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The High Court has recently held that a large number of businesses who hold business interruption insurance policies and who were forced to close as a result of the pandemic are entitled to compensation by their insurers. 

Whilst this is an important ruling for thousands of businesses who have been struggling to survive the impact of the COVID-19 pandemic, uncertainty remains.  

Here are our five key points to take away:

  1. The High Court Judges considered 21 standard policy wordings and found substantially in favour of the policy holders on two key aspects: i) ‘denial of access clauses’ which state that an insurer should pay out if something is preventing a business from accessing its premises; and ii) ‘disease clauses’ which state that an insurer should pay out if a business is closed due to certain infections.
  2. It is anticipated that the decision could impact up to £1.6 billion worth of policies and is likely to provide helpful guidance on the interpretation of similar policy wordings adopted by other insurers, who were not a party to the proceedings.
  3. Despite the positive headlines, there is no immediate certainty as to whether there will be pay outs from the insurers.   Whilst the decision is binding on the insurers whose policies were considered as part of the case, it is likely to be subject to an appeal given its importance.
  4. Even if the decision is upheld on appeal, the right of each policy holder to claim for their losses will remain subject to any limitations or restrictions set out in each specific policy. 
  5. In any event, it is important for any policy holder to take prompt action. Insurers may seek to avoid liability on the basis that they have not been promptly notified of a claim.   There may also be other ways that a policy holder can secure compensation, including by pursuing a claim against their insurance broker or a complaint to the Financial Ombudsman Service.

If you would like to understand more about the case and how it may affect your business, please contact Jonathan Cole, a Senior Associate in the Commercial Dispute Resolution team at Goodman Derrick at

This guide is for general information only and should not be relied upon as providing specific legal advice.