Information about the FCA business interruption Test Case

On 1 May 2020, the Financial Conduct Authority (FCA) announced that it intended to obtain a court declaration to resolve uncertainty around whether certain non-damage business interruption insurance policies provide cover for losses arising as a result of COVID-19.

Although Aviva is not a party to the Test Case, it may affect policyholders insured under some business interruption policies that we provide cover for. Aviva fully supports the Test Case process, and the greater clarity and certainty that it will bring for those affected policyholders, so that valid claims can be paid as quickly as possible.

This page provides information about the Test Case and what it means for Aviva’s policyholders. It will be kept updated with additional information.

Update: the court handed down its judgment on the Test Case on Tuesday 15 September 2020.  We are carefully considering the judgment and will be providing updates to our policyholders in due course.  It is possible that the judgment or parts of it could be appealed before all of the issues are finally resolved. A hearing will take place on 2 October 2020 where applications for appeals may be made and the court will hear the parties on appropriate declarations to make in the light of the judgment. The FCA has announced that the deadline for application to an appeal court for permission to appeal is extended to 9 October 2020. If an appeal is made, we will update this page with further information. 

If you have received a communication that your claim or complaint “will not be affected by the Financial Conduct Authority’s forthcoming Test Case process”, this remains the case and the Test Case judgment will not affect the decision we have made.

If you have received a communication that your claim or complaint “may be affected by the Financial Conduct Authority’s forthcoming Test Case process”, this remains the case and we will contact you further once final resolution has been confirmed as having been reached in respect of the questions in the Test Case that are relevant to our assessment of your claim or complaint. Final resolution will not occur until all rights of appeal have been concluded.

Not all business interruption policies insured by Aviva are affected by the Test Case. See here for those that are.


1. What is the Test Case?

The issues relating to the impact of COVID-19 on business interruption policies are complex.  By using a special court procedure, the FCA is seeking to obtain clarity on a much quicker timescale than would otherwise be possible. 

Following consultations with insurers, policyholders and insurance brokers, the FCA chose a selection of policy wordings which it considered is representative of the most important issues in dispute between policyholders and insurers 1. These policy wordings, and a selection of the insurers which provide insurance on those policy wordings, were included within the scope of the Test Case.  

Here is a summary of the key Test Case developments so far:

9 June 2020

The FCA formally started the Test Case process.

16 June 2020

The first case management conference was held. At this it was confirmed that:

•         the hearing for the Test Case would start on 20 July (expected to last eight days);

•         the case would be heard by Lord Justice Flaux and Mr Justice Butcher; and

•         the parties would need to take a number of steps by specific dates before 20 July.

23 June 2020

Insurers filed their Defences.

26 June 2020

The second case management conference was held, at which the court gave various directions relating to how the test case is to proceed.

3 July 2020

The FCA filed its reply to the Insurers’ Defences.

10 July 2020

The FCA and Intervenors’ skeleton arguments were served. 

14 July 2020

The Insurers’ skeleton arguments were served.

20 – 23 July and 27 – 30 July 2020

8 day court hearing took place before Lord Justice Flaux and Mr Justice Butcher.

15 September 2020

Judgment handed down.

2 October 2020

Hearing due to take place for applications for appeals and court declarations following the judgment.

9 October 2020

Deadline for application to appeal court for permission to appeal.

We will keep this summary updated as the Test Case progresses. The court handed down its judgment on the Test Case on Tuesday 15 September 2020, which can be accessed here. We are carefully considering the judgment and will be providing updates to our policyholders in due course. It is possible that the judgment or parts of it could be appealed before all of the issues are finally resolved. If an appeal is made, we will update this page with further information.

You can also find additional information and documents on the FCA’s webpage relating to the Test Case here. The FCA’s webpage includes a feature that allows you to subscribe for email updates from the FCA you may want to subscribe so that you stay updated on developments relating to the Test Case.

The Financial Ombudsman Service has also provided some information about the potential impact of the Test Case on policyholders, which can be accessed here.

2. What does the Test Case mean for Aviva policyholders?

Although Aviva is not a party to the Test Case, the outcome of the Test Case may affect Aviva’s review of claims made under certain business interruption policies we provide insurance cover for:

  • Aviva provides insurance on one of the policy wordings which is specifically being considered by the Test Case (RSA type 4 of 4 (Marsh / Jelf Material Damage & BI – Resilience))
  • The Test Case will also provide guidance on the interpretation of some other business interruption policies that Aviva provides insurance cover for.

3. Which policies insured by Aviva may be affected?

We have considered which of our relevant Business Interruption policies that we provide cover for may be affected by the outcome of the Test Case. In particular, we reviewed policies issued before 17 June 2020 which provide cover for business interruption caused by:

  • The presence of a disease at, or in the vicinity of, an insured premises (a disease trigger); and/or
  • The action of the government or other authority which prevents or restricts the access or use of an insured premises (a denial of access trigger).

A list of policies which may be affected by the Test Case, as published on the FCA’s webpage, is available here. Inclusion on this list does not necessarily mean the outcome on any particular claim for the policy wordings listed will be affected.

4. What are the implications of the Test Case for my claim or complaint?

We have written to policyholders who have made claims or complaints for non-damage business interruption losses related to the coronavirus pandemic under relevant business interruption policies to inform them whether or not their claim or complaint may be affected by the Test Case, and the implications of that.

Once the issues being considered in the Test Case have been resolved, we will be revisiting any claims, including those we have declined, and complaints relating to COVID-19 and decisions made on affected policies to ensure they are handled in line with the court’s decision.

You can still refer complaints to the Financial Ombudsman Service. If your Policy is affected by the Test Case, any time limits to make such a complaint will be suspended during the Test Case.  

5. Do I need to do anything?

If you have already made a claim or a complaint, you do not need to do anything as the FCA is taking the Test Case on behalf of policyholders.

When the outcome of the Test Case is known, we will review our decisions to ensure they are in line with the court’s judgments. If the position on your claim or complaint has changed, we will write to you.


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