The Supreme Court has today delivered its judgment in the Financial Conduct Authority (FCA)'s business interruption insurance test case.

Many policyholders whose businesses were affected by the Coronavirus pandemic suffered significant losses, resulting in large numbers of claims under business interruption policies.

In some cases, insurers had accepted liability under these policies, however in other cases insurers had disputed liability.

An original judgement last September resolved most of the key issues but, because the FCA was unable to reach agreement, insurers and the watchdog made 'leapfrog' appeals to the Supreme Court (without going to the Court of Appeal first).

The Supreme Court has now substantially allowed the FCA's appeal on behalf of policyholders.

This completes the legal process for impacted policies and means that an estimated 370,000 policyholders will now have their claims for coronavirus-related business interruption losses paid.

Sheldon Mills, executive director, Consumers and Competition at the FCA, said: "Coronavirus is causing substantial loss and distress to businesses and many are under immense financial strain to stay afloat. This test case involved complex legal issues.

"Our aim throughout this test case has been to get clarity for as wide a range of parties as possible, as quickly as possible, and today's judgment decisively removes many of the roadblocks to claims by policyholders."