Home

Welcome to the ERGO UK web site!

On 9 June 2020 the FCA launched High Court proceedings against eight insurers (the Test Case). The FCA is seeking the court’s guidance on the meaning of certain key words and phrases by reference to a representative sample of policy wordings that do not require damage to the insured’s property in the context of COVID-19 business interruption claims.  The Test Case relates to policies written in England, Wales and Northern Ireland.

The nature and purpose of the Test Case

  • As announced by the FCA, the purpose of the Test Case is to seek to resolve certain key contractual uncertainties and ‘causation’ issues that the FCA intend will provide clarity for policyholders and insurers alike. 
  • The FCA has made clear that the Test Case will not determine how much is payable under any individual policies which are held by the court to respond. Such issues will still need to be determined with each insurer. 
  • A trial of the issues in the Test Case concluded on 30 July 2020. 
  • During the trial, the FCA put forward policyholders’ arguments on their behalf. The court also heard from lawyers for certain policyholders.
  • No fixed date has been provided as to when the judgment will be available, but the Court has indicated that it will not be available before mid-September 2020.

ERGO will continue to post regular updates on the Test Case to this website.

FCA Guidance for insurers

On 17 June 2020 the FCA issued guidance for insurers and insurance intermediaries in respect of handling claims and complaints for business interruption policies during the Test Case (the FCA Guidance). Although ERGO is not directly involved in the Test Case, it was required to inform the FCA by 8 July 2020 whether, by reference to its own policies, the outcome on claims generally may be affected by the final resolution of the Test Case or whether the outcome will not be affected. 

ERGO has written to all policyholders who have made business interruption claims where there has been no damage to the insured’s property and where such claims have been declined or remain unresolved as well as policyholders who have made a complaint against ERGO or referred their complaint to the Financial Ombudsman Service following the declinature of a claim by ERGO. In accordance with the FCA Guidance, ERGO has explained whether or not policyholders’ claims or complaints are potentially affected by the final resolution of the Test Case and the implications of that.

For further information on the Proceedings, you can visit: https://www.fca.org.uk/firms/business-interruption-insurance 

You may wish to subscribe for email updates from the FCA by visiting: https://www.fca.org.uk/sign-business-interruption-bi-insurance-email-updates 

For further information regarding complaints to the FOS, you can visit: https://www.financial-ombudsman.org.uk/businesses/complaints-deal/complaints/coronavirus-covid-19-information-businesses

3 August 2020

Covid-19 Update

Please note that our London and Birmingham offices are currently closed due to Covid-19 restrictions.

However, staff are working and available as normal via email.

Read more about the ERGO Group and its broad range of activities at www.ergo.com

Contact
toggle