Do you know about the business interruption insurance coverage test case in progress in the United Kingdom? To create some consistency and avoid a litigation morass, the Financial Conduct Authority (FCA) has brought a test case, something like a declaratory judgment. The FCA regulates the UK financial services industry. Their work includes protecting consumers, stabilizing the financial services industry and promoting competition. Eight insurers have agreed to be bound by the test case decision. Some of those defendants, such as Zurich, Arch, and Royal & Sun Alliance, also do business in the United States. Also bound will be their managing agents and sales brokers and agents. Issues to be considered include what constitutes “property damage” under the policy and the effect of a pollution exclusion, the same issues coming up in lawsuits in the United States.
The outcome will be binding in the UK, but why should United States insurance professionals care?