The British Supreme Court ruled on Friday when the financial regulator, on behalf of many SMEs, was contesting the decision not to compensate them for forced business interruptions suffered as a result of the pandemic.
“The Supreme Court allows 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 out of business due to restrictions linked to the pandemic, such as shops, pubs, restaurants and the nightlife (bars, nightclubs, concert halls).
In a statement released after the Supreme Court’s ruling, the FCA said thousands of businesses will now be able to obtain compensation for losses suffered.
“We will be working with the insurers to make sure they move quickly to pay out the claims as ordered, with interim payments where possible,” said Sheldon Mills, an FCA official.