The British Supreme Court ruled on Friday in favor of the financial regulator who was contesting on behalf of many SMEs the decision of insurers not to compensate them for forced interruptions of activity suffered because of the pandemic.
“The Supreme Court authorizes the appeal of the FCA (Financial Conduct Authority, editor’s note) and rejects the appeals of the insurers”, according to a statement from the highest British court.
This decision, which will have consequences for around 370,000 companies, could generate compensation of up to 1.2 billion pounds.
The FCA launched the business interruption insurance case after thousands of SMEs were denied compensation.
Some insurers claimed that the Covid-19 pandemic was not among the cases covered by their policies.
In September, a court had largely ruled in favor of the FCA in a first trial which denounced “the lack of clarity” of the policies in question.
The companies concerned are those which are deprived of activity due to restrictions linked to the pandemic, such as shops, pubs, restaurants and the nightlife sector (bars, nightclubs, concert halls).
In a statement released after the Supreme Court’s decision, the FCA said thousands of companies will now be able to obtain compensation for the losses suffered.
“We will work with the insurers to ensure that they act quickly to pay out the indemnities as requested in the judgment, with interim payments when possible,” said Sheldon Mills, an FCA official.