Client Update - Australian and UK business interruption test cases

Client Update - Australian and UK business interruption test cases

19 January 2021


UK FCA Test Case - Appeal decision 


On Friday 15 January 2021 the UK Supreme Court handed down its judgement in the appeal from the UK High Court’s September 2020 judgement in the FCA Test Case. 

A copy of the appeal judgement and a press release issued by the UK Supreme Court can be found on the UK Supreme Court’s webpage.  Insurers’ appeals were dismissed and the FCA’s appeals were allowed, with some qualifications. 
Further details and background to the FCA Test Case and appeal judgement can be found on the UK Financial Conduct Authority’s webpage.

As we outlined in our 7 October client update, the FCA Test Case decision will not be binding in Australia however the UK Courts’ interpretation may provide some guidance to Australian insureds and their insurers in considering whether an insured’s particular circumstances and claim may fall for cover under a BI non-damage extension.  Whether a BI claim is ultimately covered under an Australian policy will depend on the specific policy wording and the circumstances of the claim itself (together with any relevant Australian legal principles or legislation which may apply). 

Australian Test Case - current status


As set out in our prior client updates (which can be found on the Aon Newsroom), a test case endorsed by the Australian Financial Complaints Authority (AFCA) and the Insurance Council of Australia (ICA) was filed in the Supreme Court of New South Wales and judgement was given in favour of Insureds in November 2020.  The Australian Test Case relates only to policies which refer to the “Quarantine Act and subsequent amendments”.
Insurers have applied for special leave to appeal to the Australian High Court.  A hearing date for that application has not yet been set.

The ICA and AFCA have more details on their websites about the Australian Test Case, the November decision and the current appeal which can be found here and here.  

It is possible that further test cases will be lodged in Australia to test other aspects of coverage and policy response. We will provide updates on relevant developments in our Aon Newsroom.

Additional information and how to lodge a claim

Our COVID-19 business interruption claims outline provides details of how to lodge a COVID-19 business interruption claim.

If you have notified a BI claim which relates to COVID-19 please contact your assigned Aon claim’s contact to discuss any specific questions you may have.  Aon clients can also contact a member of their Aon account team for a broader discussion on business interruption or any other aspect of your insurance cover at any time.

For further information please contact:

Mark Ronan
Chief Claims Officer - Pacific

Click here to visit our  news room