Business Interruption

On 15 January 2021, the UK Supreme Court announced its verdict on the appeals heard in the Financial Conduct Authority’s (FCA) business interruption test case. Although NFU Mutual was not a defendant of this test case, we have welcomed the opportunity to deliver clarity for our policyholders.

We have reviewed both the High Court and subsequent Supreme Court rulings to see if issues decided in respect to any similar NFU Mutual policy wordings will affect any of our customers’ claims. We can confirm that our position is unchanged following the appeal in the Supreme Court - our three core non-damage business interruption polices do not respond to COVID-19 related losses.

Further details on this decision can be found below.

NFU Mutual’s policy wordings

There was one NFU Mutual policy – ‘Hospitality Endorsement – Prevention of Access’ – which we identified as similar to those being assessed by the courts and might potentially be affected by the outcome of the legal process.

The High Court decided ‘Prevention of Access’ policies that included wordings relating to “an incident” - as NFU Mutual’s does – relate to” something which happens at a particular time, at a particular place, in a particular way ...” this clause is intended to cover local incidents, of which the typical examples are a bomb scare or a gas leak or a traffic accident.”

The High Court therefore found that the pandemic and the restrictions that followed could not be considered to be an “incident”, and therefore the judgment does not trigger cover for our customers.  

This ruling was not appealed by the FCA to the Supreme Court and so the High Court’s decision still stands.

The judgments by the High Court and the Supreme Court have now been fully reviewed and we can confirm that the findings do not trigger cover for our customers. The NFU Mutual ‘Prevention of Access’ wording does not cover the lockdown that followed the outbreak of COVID-19 and therefore NFU Mutual’s position is unchanged.

In the case of the other two core non-damage BI policy cover extensions we offer;

  • we name the diseases covered in our Human Disease extension, so customers know which diseases are covered if they need to claim, and COVID-19 is not included in that list.  We also require the disease to be “on the premises” which was not considered in the test case.
  • our cover for interruption caused by a Public Emergency has a clear exclusion for infectious or contagious disease. 

We understand this outcome will be disappointing for those affected.

For more information

If you would like further information on how we are helping businesses through providing payment holidays and mid-term adjustments, or to discuss your individual circumstances, please contact your local Agent. 

If you wish to refer your claim or complaint to the Financial Ombudsman Service, you will need to do so within six months of receipt of our final decision letter. Details of how to do this are contained in the letter. 

Read the full update from the FCA

A summary of the judgment is available from the FCA's solicitors, Herbert Smith Freehills LLP, on their website.

You can also find information on the test case on the Financial Ombudsman website.