Covid-19: Insurers Granted Permission to Appeal Insurance Decision

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Covid-19: Insurers Granted Permission to Appeal Insurance Decision

Insurance companies have been criticised for their decision to appeal a High Court judgment clarifying hundreds of businesses’ rights to insurance pay outs in the wake of the Covid-19 pandemic.

On 2nd October, the High Court granted permission for the decision to be appealed in the Supreme Court, the UK’s highest court. Those granted permission include the FCA and Hiscox Action Group, as well as Arch Insurance (UK) Ltd, Argenta Syndicate Management Ltd, MS Amlin Underwriting Ltd, Hiscox Insurance Company ltd, QBE UK Ltd and Royal & Sun Alliance Insurance Plc.

Sonia Campbell, a partner at Mishcon de Reya, who represented the Hospitality Insurance Group Action, labelled the decision another “nail in the coffin for small businesses” and “further evidence of insurers’ attempts to delay paying out on policies”.

The case being appealed was heard in the High Court in September. Upon examination of a sample of eight insurance policies, it found that the circumstances of the Covid-19 pandemic triggered most, but not all, of the clauses covering notifiable disease within a specified radius, and certain denial of access clauses, which concern situations where public authority restrictions deny customers access to the business premises. As such, policyholders were entitled to pay outs from insurance companies which would put their businesses back in the position that they would have been in had Covid-19 never occurred.

These findings were believed by the Financial Conduct Authority to have directly affected as many as 370,000 policyholders[1], to whom the guarantee of insurance pay outs would have provided a much-needed lifeline following months of lost business during the government-enforced lockdown. These pay outs are now unlikely to be made until the lengthy appeal process is finished sometime next year. This leaves businesses facing many more months of financial uncertainty and puts many at risk of collapse.  

The insurers and the FCA now have a month to decide whether they will appeal the decision. If they do decide to appeal, the Supreme Court’s decision as to whether the circumstances caused by the Covid-19 pandemic trigger the denial of access and notifiable disease clauses will be final.

If you have any questions or worries about your business, please do not hesitate to contact us via telephone on 01793680053 or email at


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