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15 Jan 2021 | 10:13

Supreme Court rules against insurers on Covid-19 payouts

(Sharecast News) - RSA, Hiscox and other insurers will have to pay out on thousands of business interruption policies because of Covid-19 after losing an appeal to the Supreme Court. The Financial Conduct Authority said the Supreme Court largely allowed the regulator's appeal on behalf of policyholders. The Supreme Court ruled in policyholders' favour for different reasons than the High Court, meaning more policyholders will have valid claims and some payouts will be higher, the FCA said.

The FCA and six companies brought the test case after insurers refused to pay out to small and medium-sized enterprises for the costs of business disruption caused by Covid-19. The Supreme Court ruling ends the legal proceedings and opens the way for policyholders to receive the money they were due.

Sheldon Mills, the FCA's consumers and competition director, said: "Coronavirus is causing substantial loss and distress to businesses and many are under immense financial strain to stay afloat. This test case involved complex legal issues.

"Our aim throughout this test case has been to get clarity for as wide a range of parties as possible, as quickly as possible, and today's judgment decisively removes many of the roadblocks to claims by policyholders."
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