Outcome of FCA business interruption test case eagerly awaited
As Britain basks in the dog days of summer, insurers and brokers are also feeling the heat.
The FCA’s business interruption (BI) test case is due to be heard shortly after Insurance Times goes to press, with lawyers poring over policy wordings to establish whether insurers were right to exclude Covid-19 as a trigger for claims.
While insurers are fighting to protect their reputations and revenue, brokers could be next in line for scrutiny should the carriers be let off the hook.
The stakes are high indeed.
If businesses cannot seek financial redress from their insurer for their losses, the next course of action could be to go after their insurance advisor.
And if brokers are found liable in relation to Covid19 BI claims, brokers’ professional indemnity (PI) could become uninsurable and this class could effectively disappear, or at least become prohibitively expensive.
The broker PI market has already virtually come to a standstill, with little new business being written and others already pulling out of the class.
The business being written now often features Covid-19 exclusions, which shows a fear of what may be coming brokers’ way. For now, brokers must watch and wait while the battle is played out in court.
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