Businesses win pandemic insurance payouts after UK top court ruling

The UK Supreme Court ruled on Friday that thousands of businesses should be insured for some losses amassed after a national lockdown to curb the coronavirus pandemic in a test case that pitched the markets regulator against major insurers.

Six of the world's largest commercial insurers -- Hiscox, RSA, QBE, Argenta, Arch and MS Amlin -- said many business interruption policies did not cover widespread disruption after Britain's first national lockdown last March.

But senior judges said payouts should be triggered after scrutinising 14 non-damage insurance policy clauses -- which cover disease, denial of access to business premises and hybrid clauses -- in a resounding victory for policyholders and the regulator.

The Financial Conduct Authority (FCA) took insurers to court last June in a case that has been expected to have ramifications for 370,000 policyholders, 60 insurers and billions of pounds in claims because many policies have similar wordings.

Smaller businesses, from restaurants to nightclubs and wedding planners to beauty parlours, said they faced ruin after attempts to claim compensation for business losses during the pandemic were rejected by insurers -- and the test case has been closely-watched overseas as similar battles brew.