Health and fitness and leisure businesses in the UK will find out in September if they can make a claim on their business interruption insurance for losses caused by the pandemic.

The High Court recently completed a review and test trial of the policy wording of eight major insurers, to decide whether or not the COVID-19 pandemic should trigger a business interruption insurance pay out.

Overseen by Lord Justice Flaux, the review focused on eight insurers – Arch, Argenta, Ecclesiastical, MS Amlin, Hiscox, QBE, RSA and Zurich – and the court’s rulings are expected to apply to nearly 50 insurers, who have sold insurance to 370,000 customers, many of which are small businesses.

The judgement will be legally binding on the insurers that are parties to the test case. It will also provide "persuasive guidance" for the interpretation of similar policy wordings and claims.

The test case was brought by the Financial Conduct Authority (FCA) and comes as the pandemic has led to widespread disruption and business closures resulting in substantial financial loss.

Many customers have made claims for the losses under their business interruption insurance policies.

There has been widespread concern, however, about the lack of clarity over the policies and whether customers can make successful claims – and the basis on which some insurers are making decisions in relation to claims.

"The variation in the types of cover provided and wordings used, mean it can be difficult to determine whether customers have cover and can make a valid claim," said a spokesperson for the FCA.

"There are genuine doubts over the appropriate interpretation of the wording in some cases.

"This has led to uncertainty and disputes, with many customers who believe they have valid claims having these rejected by their insurer."

Companies who have not yet done so, are being encouraged to make claims as soon as possible.

"If you haven’t already, submit a claim as soon as possible, as this will be a condition of your policy," said Catrin Povey, an insurance lawyer at law firm Capital Law.

"If you've already made a claim, you should have already been advised by your insurer whether your policy is potentially affected by the outcome of the test case, or if not, the reasons why it is not likely to be affected.

"If your policy is potentially affected, then don’t just wait for the outcome of the test case to advance your claim. For example, you can continue to gather information in support of your claim."

• To find out more about the test case and the way the FCA is approaching it, click here.

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